China's iron ore futures extended gains on April 1 after recording its best quarter in nine, buoyed by strong economic data and tight supply concerns after Rio Tinto cut its 2019 output for iron ore shipments.
The most-active iron ore contract for May delivery rose 2.1% to 634 yuan/t ($94.58/t).
An official survey showed on March 29 that factory activity in China unexpectedly grew for the first time in four months in March, suggesting government stimulus measures may be starting to take hold in the country.
The improvement in business conditions was partly driven by increasing factory output, which posted its fastest pace in six months, and growing new orders.
Firm iron ore prices also came as the world's No.2 iron ore miner, Rio Tinto, cut its 2019 outlook for iron ore shipments from Australia's Pilbara region due to tropical cyclone.
That has further fuelled supply concerns after it issued force majeure notices to some iron ore customers last week.
Industrial plants in northern China have restarted some production after six months of environmental restrictions.
Utilization rates at steel mills across China climbed for a second week last week as of March 29 to 63.64%, data showed.
However, government officials and industrial experts in China are calling on mills to restrain output, as the flooding of products in the market severely dents profit margins in the sector.
An official from industrial ministry said on March 30 there will be inspections across China in 2019 to ensure that factories aren't re-starting closed capacity and no new capacity is being launched without approvals.
Benchmark construction steel rebar prices on the Shanghai Futures Exchange gained 1.2% to 3,722 yuan/t.
Hot-rolled coil futures climbed 1.1 to 3,747 yuan/t.
Expectation of resuming operations at mills also lift prices of other steel-making ingredients.
Dalian coking coal rose 1.5% to 1,248 yuan/t, while coke edged up 0.8% to 1,991 yuan/t.
Source:sxcoal
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