Chinese iron ore futures went up on Monday, helped by worries about supply and falling portside stocks of the steelmaking ingredient. The fact that some COVID-19 restrictions were eased in the world’s largest steel producer also made traders happier.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange ended the morning session 1.1 percent higher at 812.50 yuan ($119.64) a tonne. This was a comeback after it had its biggest weekly loss in almost three months on Friday.
On the other hand, the most-traded June contract on the Singapore Exchange (OTC: SPXCY) fell by 1% to $125.95 per tonne.
Atilla Windell, managing director at Navigate Commodities in Singapore, said that falling shipments and arrivals of iron ore into China from Australia and Brazil from week to week should help a little with the fragile mood.
Windell said that iron ore and other materials used to make steel were boosted by news that Shanghai would slowly start doing business again after being closed for weeks.
Coke went up 2.6% and coking coal went up 3.5% in Dalian.
Shanghai made plans Monday for things to get back to normal on June 1. This will mark the end of the painful COVID-19 lockdown, which has been going on for more than six weeks and has caused China’s economy to slow down sharply.
In four districts of Beijing, the government has told people they can work from home, but they have not put the whole city on lockdown.
“Robust blast furnace capacity utilization rates, daily offtakes of (iron ore), and dwindling portside inventories should all help,” said Widnell.
According to data from SteelHome consultancy, China’s iron ore port stocks were at 141.75 million tonnes on May 13. This was the lowest level since the third week of October.
On the Shanghai Futures Exchange, the price of construction steel rebar fell by 0.2%, and the price of hot-rolled coil fell by 0.1%. The price of stainless steel went up by 1.8%.
In April, China’s crude steel production went up by 5.1% from the month before. This was because the effects of environmental restrictions and COVID-19 were lessening, but it was still well below levels from a year ago.
