Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

China iron ore extends rally, hot-rolled steel coil hits record peak

Published 20/01/2020, 02:47 pm
© Reuters.  China iron ore extends rally, hot-rolled steel coil hits record peak

* Benchmark Dalian iron ore hits highest in more than a week

* Spot 62% iron ore closes in on $100/tonne - SteelHome data

* China's iron ore port stockpile drops for 3 straight weeks

* Shanghai hot-rolled steel coil futures scale record peak

By Enrico Dela Cruz

MANILA, Jan 20 (Reuters) - Chinese iron ore futures rose on Monday, extending last week's gains, fuelled by concerns over supply of the steelmaking raw material and an improved outlook for steel demand, but lighter trade is expected as the Lunar New Year break approaches.

The Dalian Commodity Exchange's most-traded iron ore contract DCIOcv1 , expiring in May, rose 1.3% to 675 yuan ($98.41) a tonne, its highest since Jan. 9.

Supply issues have also pushed spot iron prices higher, with the benchmark 62% iron-content ore at $96.70 a tonne as of Jan. 17, the strongest since Sept. 17 last year, data from SteelHome consultancy showed. SH-CCN-IRNOR62

Imported iron ore stocked at China's ports fell for three weeks in a row, hitting 127.35 million tonnes on Friday, the lowest since the last week of September 2019, SteelHome data also showed. SH-TOT-IRONINV

Adding to supply concerns, Brazil's Vale SA VALE3.SA has halted tailings operations at its Esperança mine, citing the need to do a technical evaluation and potentially carry out work to improve safety at the site. the world's largest iron ore miner, said in December it would slash output from its Brucutu mine for up to two months while it evaluates the stability of a nearby dam, prompting it to lower its output guidance for the first quarter of 2020. miner Rio Tinto (LON:RIO) RIO.AX , meanwhile, reported reduced iron ore shipments in the last quarter of 2019, highlighting its struggles to overcome fires, poor weather and operational challenges, analysts at ANZ Research said in a note. prices on the Shanghai Futures Exchange rose for a fourth straight session amid improving demand prospects, with the most-traded hot-rolled coil contract scaling a record peak.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

China's December macro-economic data released last week is mostly better than or in line with market expectations, which lifted overall investor sentiment, along with the signing of the U.S.-China Phase 1 trade deal, Argonaut Securities analyst Helen Lau said.

"With China government's periodic monetary easing to fine tune the economic growth, we expect China's 2020 economic conditions to be in a much better shape than in 2019," Lau said. "Against this development, overall demand for commodities is set to improve in our view."

FUNDAMENTALS

* The Shanghai Futures Exchange's most-traded construction steel rebar contract SRBcv1 was up 0.7% by 0320 GMT.

* Hot-rolled steel coil SHHCcv1 , used in cars and home appliances, climbed as much as 0.9% to a record-high of 3,655 yuan a tonne.

* Dalian coking coal DJMcv1 gained 0.3% and Dalian coke DCJcv1 advanced 0.9%.

* Shanghai stainless steel futures SHSSc1 were down 0.3%.

* Many construction projects in China have been halted while some steel mills have shut down early ahead of the Lunar New Year break next week.

($1 = 6.8589 yuan)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.