China's iron ore futures rose as much as 4.4% on Thursday staging a smart recovery from the previous session on a big spread between spot cargoes and futures and demand for the steelmaking ingredient strengthened.
“There have been speculations that other places like Handan city in Hebei will also implement production curbs, but they haven’t,” a Tangshan-based analyst said, adding that iron ore demand is still supported by resilient steel output.
Daily crude steel output at major steel mills in China stood at 2.3 million tonnes in the first ten days of April, according to the China Iron and Steel Association, up 2.9% from end-March and having jumped 16.9% on an annual basis.
Analysts with Huatai Futures also noted that price spread between spot cargoes and futures is relatively big now, which leaves room for futures prices to increase.
Spot prices of iron ore with 62% Fe content for delivery to China were unchanged from the previous trading day at $173.5 a tonne on Wednesday, data compiled by SteelHome consultancy showed.
The most actively traded iron ore on the Dalian Commodity Exchange, for September delivery, closed up 3.6% to 1,049 yuan ($160.56) per tonne, after hitting a high of 1,057 yuan earlier during the session.
Dalian coking coal, for May delivery, gained 0.3% to 1,601 yuan per tonne.
Coke futures fell 1.4% to 2,422 yuan per tonne at close.
Steel prices on the Shanghai Futures Exchange edged down.
Construction rebar, for October delivery, declined 0.5% to 5,107 yuan a tonne.
Hot rolled coils, used in the manufacturing sector, inched 0.6% lower to 5,393 yuan per tonne.
The June contract for stainless steel futures on the Shanghai bourse ended down 0.5% to 13,845 yuan a tonne.
Source:Reuters
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