Iron ore futures inched higher on Tuesday, as a private survey showing forecast-beating China factory activity growth in August helped market participants shrug off worries over fresh sintering curbs in the world’s top steel producer.
Iron ore’s most-traded January 2021 contract on China’s Dalian Commodity Exchange ended the morning session up 0.2 percent at 846 yuan ($124.07) a ton, extending gains into a fourth session.
The Singapore Exchange’s October contract rose 0.7 percent to $119.13 a ton and was on track for a third consecutive session of gains.
China’s August factory activity expanded at the fastest clip in nearly a decade, bolstered by the first increase in new export orders this year as manufacturers ramped up production to meet rebounding demand, a private survey showed.
The survey mirrored the official Purchasing Managers’ Index’ (PMI) improving trend in new export orders, which together with solid growth in the services sector indicated a continued recovery in China from the coronavirus shock.
Although China’s official PMI showed slower August factory activity growth, it remains in expansionary territory, said Daniel Hynes, a senior commodity strategist at ANZ.