BEIJING- Benchmark iron ore futures on China’s Dalian Commodity Exchange surged on Tuesday, gaining as much as 4.5 percent in early trade, propped up by falling portside inventories and upbeat demand at downstream sectors.
The most-actively traded contract of the steelmaking ingredient, for January delivery, was up 3.2 percent at 841 yuan ($120.98) per ton, after hitting as much as 852 yuan earlier.
“Concerns over iron ore shipments and structural contradiction of fines inventories are the main factors to drive the price,” Huatai Futures wrote in a note.
China’s portside iron ore stockpiles fell for a second straight week to 116.15 million tons by Aug. 7, data compiled by SteelHome consultancy showed.
Huatai Futures said market demand for steel products are gradually recovering, and forecasts hot-rolled coils to outperform rebar in the third quarter, but expects the latter to take turns to outperform hot-rolled coils in the following quarter.