Iron ore rebounds as Chinese steel mills ramp up purchases

reuters.com Price,  Iron Ore,  futures 2020-03-03 09:05:58

Benchmark Dalian and Singapore iron ore futures rose sharply in morning trade on March 2, rebounding from last week's slump as declining stockpiles at Chinese ports suggested a recovery in steel mills' appetite for the raw material.


Futures prices of other steelmaking raw materials as well as steel products in China also rose, shrugging off official and private surveys that showed factory activity in the world's second-largest economy contracted at the sharpest pace on record last month in the wake of a coronavirus outbreak.


The Dalian Commodity Exchange's most-traded iron ore contract, expiring in May, was up 5.4% at 650.50 yuan/t ($93.38/t) by the mid-day break, after rising to as high as 652 yuan/t. Futures on the Singapore Exchange advanced as much as 5.6%.


Factory operations and construction activities are gradually resuming in China, the world's top steel producer, after a prolonged Lunar New Year holiday, work stoppages and travel restrictions aimed at containing the virus epidemic.


Although Chinese steel mills face pressure from rising inventories and shrinking profit margins, prompting them to reduce output, some of them were seen resuming buying iron ore to rebuild stocks as transportation curbs have also eased.


"Business restarts are progressing, although still at a slow rate," said Richard Lu, a senior analyst at commodity consultant CRU, in Beijing.


But for Lu, it was still early to say that such gains in futures prices in China's ferrous complex could be sustained.


"The number of restarted business looks high, but actual production level remains far from normality for steel end-use sectors," he said.


With no meaningful pick-up in steel demand expected anytime soon, he said mills might be forced to further cut production.


While the recovery in steel demand remains slow, supplies of raw materials are rising faster, in contrast, he said. "This will accelerate price decreases going forward unless end-use demand recovers faster than expected."


(Writing by Emma Yang  Editing by Jessie Jia)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editor's Pick

1 Indonesia thermal coal prices continue to rise on supply concerns 2023-09-28

Indonesian thermal coal prices moved higher amid steady demand from China and India on concerns of supply shortage in the near term. Most Chinese traders expected the prices to have a higher chance to

2 China's portside thermal coal prices stable ahead of holiday 2023-09-28

China's portside thermal coal prices were generally steady on the last trading day ahead of the Golden Week, due to the early exit of many traders. However, most traders were optimistic on post-holida

3 Monthly: China Sep PCI coal market strong but cools down near mth end 2023-09-28

China's PCI coal prices were supported as a whole in September due to raw coal supply constraints and steel mills' and traders' active buying.During the month,? raw coal output was tightened due to st

4 China's coke, coking coal markets expected to soften after holidays 2023-09-28

Market participants have voiced their concerns about coking coal and coke markets after the Mid-autumn and National Day holidays, with some cokemakers opting not to build feed coal stocks to high leve

5 Qinghai Jan-Aug power generation down 1.7% YoY, consumption up 10% 2023-09-28

Northwestern China's Qinghai province generated 66.98 TWh of electricity from January to August, falling 1.7% from a year earlier, a largely narrowed rate of decline compared to the first seven months

6 Weekly global coal market news summary (Sep 25-Sep 28) 2023-09-28

Indonesian thermal coal prices remain resilient despite lower liquidityIndonesian thermal coal prices have remained robust, defying a decrease in trading liquidity, attributed in part to an industry c

7 Weekly China coal market news summary (Sep 25-Sep 28) 2023-09-28

China's pithead thermal coal prices soften ahead of holidayThermal coal prices in China have seen a sudden decline after rising for more than a month, as many buyers retreated ahead of the National Da

8 U.S. Jan-Aug thermal coal exports up to 5-yr high, shipping data 2023-09-28

Thermal coal exports of the United States registered a year-on-year rise of over 20% during the first eight months of 2023, climbing to the highest level since 2018, Reuters reported, citing shipping

9 Inner Mongolia's Ordos Jan-Aug raw coal output up 3.1% YoY 2023-09-28

Ordos, a major coal heartland in Inner Mongolia, reported 539 million tonnes of raw coal output during January-August, up 3.1% year on year, representing 67.4% of total production in the region.Inner

10 China futures market updates at close (Sep 28) 2023-09-28

Check out latest updates on the Chinese futures market for coking coal, coke, iron ore and others at close.

Most Read Articles

1 Mongolia on track to meet 50 Mt coal export target 2023-09-26

Mongolia is on track to fully complete its annual coal export target in 2023 considering high volume so far, Mongolian media Ikon News reported, citing a statement from the Minister of Mining and Heav

2 Indonesia thermal coal prices continue to rise on supply concerns 2023-09-28

Indonesian thermal coal prices moved higher amid steady demand from China and India on concerns of supply shortage in the near term. Most Chinese traders expected the prices to have a higher chance to

3 China's thermal coal prices down for 3rd day despite strict safety scrutiny 2023-09-26

China's portside thermal coal prices faltered for the third day on September 26, extending the downward trend from late last week, although safety checks in major mining regions remained stringent and

4 France to phase out coal power by 2027 2023-09-27

French President Emmanuel Macron declared on September 24 that his country will completely abandon coal-fired power generation by 2027.The country will hit the target by converting its last two coal p

5 China futures market updates at close (Sep 28) 2023-09-28

Check out latest updates on the Chinese futures market for coking coal, coke, iron ore and others at close.

6 China's coke, coking coal markets expected to soften after holidays 2023-09-28

Market participants have voiced their concerns about coking coal and coke markets after the Mid-autumn and National Day holidays, with some cokemakers opting not to build feed coal stocks to high leve

7 Review: China's Aug coking coal imports exceed 9 Mt; Mongolian imports hit new high 2023-09-26

China's coking coal imports surpassed 9 million tonnes in August, after 9.65 million tonnes in March and 9.81 million tonnes in January 2020, customs data showed. Mongolia and Russia remained top two

8 Indonesian thermal coal prices remain resilient despite lower liquidity 2023-09-27

Indonesian thermal coal prices have remained robust, defying a decrease in trading liquidity, attributed in part to an industry conference held in Bali.Trading activity was sluggish on September 27 as

9 Thailand Aug thermal coal imports at 7-mth high 2023-09-27

Thailand's thermal coal (including bituminous and sub-bituminous coal) imports in August reached 1.94 million tonnes, down 9.88% year on year but jumping 102.6% month on month, the highest level in se

10 How will China's Oct thermal coal prices go, to rise or fall? 2023-09-26

After experiencing continuous increase for over a month, thermal coal prices in China have recently started to decline. The question now is whether they will rebound or continue the downward trajector