Iron ore rebounds as Chinese steel mills ramp up purchases 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 or +86-351-7219322.

Share this article
Connect with us

Editor's Pick

1 Large capacity release could weigh on China's thermal coal market 2022-05-24

Market talk that China would work on a "concentrated" expansion of coal production capacity in the key producing hub of Ordos, Inner Mongolia has fueled further bearishness in the domestic thermal coa

2 China Coal Daily Track (May 24) 2022-05-24

Thermal coal Production area Thermal coal prices generally stayed stable at main production hubs, except some miners' price cuts in Yulin of Shaanxi following the government's criticism over it

3 Hubei to raise coal reserve capacity up to 16 Mt by 2025 2022-05-24

Hubei province, a province suffers the worst coal shortage in central China, plans to build coal storage capacity up to 16 million tonnes by 2025 to ensure supply, according to a provincial energy dev

4 China's coke prices still under downside risk as steel mills press for 4th price cuts 2022-05-24

China's metallurgical coke prices remained under downside risks as some steel mills may continue to cut coke prices in response to thin profit margins. Some steelmakers in Shanxi, Hebei a

5 How removal of import duty on met coke could impact Indian coke producers? 2022-05-24

Indian government announced the removal of import duty on coking coal and coke on May 21. While this move was welcomed by Indian steel manufacturers who are reeling under stress of elevated raw materi

6 Weekly China anthracite market review 2022-05-24

China's anthracite market was resilient last week, with lump anthracite prices having rises amid active purchases. Downstream buyers like chemical, construction materials and cement plant

7 Review: China's Apr coking coal imports keep rising; Australian intakes remain zero 2022-05-24

China's coking coal imports posted both year-on-year and month-on-month rises in April, while average import prices rebounded. Russia remains the largest coking coal supplier to China in the month, wh

8 Ningxia power company gains access to new coal source from Xinjiang 2022-05-24

A train loaded with 3,392 tonnes of coal produced by Tianchi Energy of TBEA Co., Ltd in Xinjiang autonomous region entered Ningxia Hui autonomous region on May 16. The coal was delivered to CHN Ningxi

9 Global thermal coal prices jump as supply further tightens from major exporters 2022-05-24

Last week, global thermal coal prices continued their upward trend for the third consecutive week, mainly due to the continued tightening of supply from Australia, South Africa and other countries, co

10 Review: China Apr thermal coal imports hit new low; intakes from main sources drop 2022-05-24

China's thermal coal imports increased for the second consecutive month in April, but remained significantly lower than the same month since at least 2012, customs data showed. Chin

Most Read Articles

1 What factors affect Australia's coking coal exports in Apr except weather? 2022-05-18

Australia exported 12.45 million tonnes of coking coal in April, down 5% from the previous month, according to the latest Kpler's cargo-tracking data. Australia mainly exported coal throu

2 China's thermal coal prices edge up on increased demand 2022-05-18

China's domestic thermal coal prices rose modestly on May 18 on expectations that easing COVID restriction will push up demand and coastal power plants need to restock for the summer. Pre

3 Chinese utility awards Russian thermal coal at lower prices, sources 2022-05-18

A Chinese state-owned power producer awarded several Russian thermal coal cargoes in its latest tender issued on May 16 at prices lower than Indonesian comparable goods, sources said, which may dent t

4 Workers on strike at India-owned coal mine in Mozambique 2022-05-18

More than 500 workers have been on strike for a week at a coal mine in Mozambique owned by a branch of an Indian group, Reuters quoted the company as saying on May 17, which dented coal production at

5 China's coking coal prices show signs of bottoming out 2022-05-19

China's coking coal prices showed signs of bottoming out in the middle of this week, with online auctions fetching higher prices thanks to the growing buying appetite from traders and coking plants.

6 Global thermal coal prices continue to rebound as supply issues continue biting 2022-05-18

Global thermal coal prices continued rising last week as supply issues in some major exporting countries remained prominent in addition to active procurement of Europe and South Korea. Da

7 High coal stocks at south China ports hamper shipments; price stable 2022-05-19

Thermal coal shipments were dented from northern China ports to those in the south and along the Yangtze River, where relatively high stockpiles are squeezing storage room for new arrivals, market sou

8 India allows utilities to import up to 30% of coal needs 2022-05-20

India's federal power ministry allows power companies to import as much as 30% of the country's coal requirement throughout the fiscal until March 2023 as part of a drive to ease its supply shortage.

9 High freight cost curbs demand for Indonesian thermal coal, traders 2022-05-20

Trading activity for Indonesian thermal coal was under pressure as elevated ocean freight rates weighed on buying interest. From South Kalimantan to Krishnapatnam port on the east coast o

10 Japan Apr coal imports up 1.6% YoY, preliminary data 2022-05-19

Japan imported 13.45 million tonnes of coal in April, up 1.6% year on year, preliminary data from the Ministry of Finance showed on May 19. The imports were worth 461.46 billion yen ($552