SINGAPORE- Iron ore futures prices ticked higher on Tuesday, buoyed by brightening demand for the steelmaking ingredient, though output cuts in top consumer China limited the rise.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.71 percent higher at 776.5 yuan ($106.91) a metric ton.
The benchmark April iron ore on the Singapore Exchange eased 0.82 percent at $101.45 a ton.
“The production among Chinese iron ore mining companies kept climbing last week,” said Chinese consultancy Mysteel, attributing the rise to a ramp-up in steel output.
From March 14-20, the daily combined output of iron ore concentrate averaged 488,500 tons a day, up 0.4 percent on-week, according to Mysteel data.
Moreover, blast furnaces have accelerated their production, and it is expected that there will be demand for iron ore replenishment in the future, said broker Galaxy Futures in a note.
Still, several steel makers in northwestern China’s Xinjiang region began production cuts from Monday, local reports said, posing headwinds for the key steelmaking ingredient.
Among them, Xinjiang Ba Yi Iron and Steel Co a subsidiary of the world’s largest steel producer, plans to cut daily crude steel output by 10 percent from Monday.
Chinese equities closed higher on Monday, buoying sentiment, though gains were capped as investors grew cautious about US President Donald Trump’s approaching tariff deadline.
