BEIJING- Singapore iron ore futures rebounded on Thursday, driven by a wave of short-covering as near-term demand in top consumer China stayed resilient, although concerns over the global trade conflict limited the upside trend.
The benchmark April iron ore on the Singapore Exchange was up 0.83 percent at $101.5 a metric ton.
“Prices are basically moving between $95 and $110 a ton, and every time when they fall below $100, there will be a rebound soon due to short-covering activities,” a Beijing-based iron ore trader said, requesting anonymity as he is not authorized to speak to media.
“In the short term, hot metal output is still recovering, so it’s unlikely to see a drastic fall in prices although downward pressure will be more intense in the second half of the year.”
Hot metal output, typically used to gauge iron ore demand, will pick up further in March due to handsome steel margins, analysts at Hongyuan Futures said in a note.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) however, closed morning trade 0.13 percent lower at 775.5 yuan ($107.18) a ton.
Prices of the key steelmaking ingredient retreated on Wednesday as market sentiment was dampened by renewed talks of China’s plan to cut crude steel production in an effort to address the oversupply issues plaguing the industry.
State planner China’s National Development and Reform Commission did not respond to Reuters’ request for comment.
Other steelmaking ingredients on the DCE advanced, with coking coal and coke up 1.59 percent and 1.14 percent, respectively.
Steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar rose 0.71 percent, hot-rolled coil added 0.89 percent, wire rod climbed 0.7 percent and stainless steel edged 0.33 percent higher.
