BEIJING — Prices of iron ore futures drifted higher on Tuesday after falling to a one-week low in the previous session, aided by hopes of demand recovery after the end of top consumer China’s military parade.
The benchmark October iron ore on the Singapore Exchange was up 0.34 percent at $102 a metric ton, as of 0149 GMT.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) was little changed at 770.5 yuan ($107.72) a ton, as of 0200 GMT.
Ore demand is likely to rebound ahead as the impact of the big event on the hot metal output is limited in duration, analysts at Zijin Tianfeng Futures said, referring to China’s military parade on September 3 to commemorate the end of World War Two.
But in the near term, prices of the key steelmaking ingredient will be pressured by falling hot metal output, a gauge of iron ore demand, which is expected to decline by nearly 2 percent in the week as of September 5, versus a weekly drop of 0.3 percent previously.
Consumption for iron ore has been resilient, supported by elevated hot metal output, which is still much higher than a year earlier despite some softening in recent weeks.
Coking coal and coke , other steelmaking ingredients, dipped 0.49 percent and 0.22 percent, respectively.
Most steel benchmarks on the Shanghai Futures Exchange extended falls. Rebar lost 0.29 percent, hot-rolled coil shed 0.3 percent, wire rod slid 0.28 percent while stainless steel gained 0.89 percent.
Steel prices will fall further in September, Jianhua Wang, an analyst at consultancy, Mysteel, said in a note on Monday, citing weak fundamentals and a persistent pick-up in steel inventories.
