BEIJING- Iron ore futures in China rose to their highest in more than four months on supply uncertainties expected to emerge during the first quarter of next year.
The most traded iron ore futures contract on the Dalian Commodity Exchange, for May 2020 delivery, soared as much as 3.2 percent to 662 yuan ($94.05) per ton in morning trade, the most since Aug. 7. It jumped 2.96 percent to 661 yuan per ton as of 0330 GMT.
Prices for spot cargoes of benchmark iron ore with 62 percent iron content for delivery to China, also tracked robust futures market and rose to $93 per ton on Monday from $89.50 in the previous session.
“The surge in iron ore prices was mainly driven by supply concerns from foreign miners in the first quarter next year,” said Tang Bingqing, an analyst with Founder CIFCO Futures, referring to Brazilian miner Vale SA lowering production outlook and the upcoming expiry of mining leases in India.
Meanwhile, demand prospects for construction steel products and steelmaking raw materials were improved as the latest Chinese Communist Party conference reiterated the need to strengthen infrastructure constructions, and did not mention real estate controls, Tang added.
Construction steel rebar on the Shanghai Futures Exchange, for May 2020 delivery, jumped 1.0 percent to 3,528 yuan per ton.
January hot-rolled coil contract, used in cars and home appliances, rose 0.7 percent to 3,690 yuan per ton. – Reuters