Wedoany.com Report-Jan 03,Iron ore futures prices rebounded on Monday, helped by improving steel margins, falling portside stocks and stimulus hopes in top consumer China, although gains were limited by seasonally slow demand.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.98% higher at 775.5 yuan ($106.25) a metric ton.
The benchmark January iron ore on the Singapore Exchange climbed 1.83% to $100.65 a ton by 0700 GMT. Earlier in the day, it hit an intraday low of $98.95 a ton.
The Dalian contract has declined 16.3% so far this year, while the Singapore contract has fallen 19.2%.
Hot metal output will likely fall further in January, though the decline is not expected to be large given that steel mills could still make money, analysts at Everbright Futures said in a note.
Hot metal output is typically used to gauge iron ore demand.
Data from consultancy Mysteel showed that 49.78% of the steelmakers surveyed were operating at a profit as of Dec. 26, up from 48.48% in the prior week.
“Currently, the divergence on market outlook is likely to widen, but a rising trend might sustain,” analysts at Galaxy Futures said in a note.
“Portside stocks extended falls, which will likely continue as major miners slow shipments and (ore) demand remains resilient (despite some falls).”
Iron ore stocks at major ports slipped for a second straight week, down by 0.6% to 146.85 million tons in the week to Dec. 27, data from consultancy Steelhome showed. However, the level was still 28.3% higher than the year-earlier period.
