BEIJING- China’s iron ore futures rose in early trade on Tuesday, shored up by expectations of higher demand as top steelmaking city Tangshan lifted its second-level smog alert.
The most-active traded iron ore futures on the Dalian Commodity Exchange, for May 2020 delivery, was up 0.2 percent at 666 yuan ($95.62) per ton.
Tangshan, which issued an orange alert last week for pollution due to deteriorating weather conditions, said on Monday it will lift its heavy pollution controls as the air quality was expected to improve.
Orange alerts, the second-highest after red in Hebei’s three-tier pollution warning system, require companies to take action to cut emissions and in some cases restrict output, although the province has a “positive list” exempting thousands of firms from production cuts.
“Domestic steel mills’ restocking supports demand for iron ore,” Huatai Futures wrote in a note, adding that iron ore prices are anticipated to be relatively strong in the short-term.
Supply for the steelmaking ingredient, however, has been affected by lean shipments from Australia and Brazil recently, Huatai Futures added.
The world’s two biggest suppliers sent out a combined 20.086 million tons of iron ore last week, down 367,000 tons from a week earlier, data from Mysteel consultancy showed. – Reuters