![](/uploads/allimg/211009/61-2110091023460-L.jpg)
Dalian iron ore rose to a one-month high in thin trade on Friday after a week-long holiday in China, with market participants upbeat about demand prospects for the raw material in the world's top steel producer.
China's electricity shortage has raised concerns energy-intensive electric arc furnaces that utilise iron scraps to produce steel could be hit, which means more steel output required from blast furnaces using iron ore.
The most-traded January iron ore on China's Dalian Commodity Exchange was 4.9% higher at 762.50 yuan ($118.24) a tonne by 0700 GMT, after a volatile trade, just below a session-high 769 yuan, its strongest since Sept. 6.
November iron ore on the Singapore Exchange jumped 5.8% to $124.25 a tonne.
The market volatility indicated fragile sentiment, however, amid signs of trouble in the Chinese property sector, which accounts for about a quarter of domestic steel demand.
“With property developers struggling due to high debt levels, the spectre of strong demand for steel and iron ore remains low,” said ANZ senior commodity strategist Daniel Hynes.
But China's steel output cuts spurred by the country's decarbonisation policy remain to be the bigger worry.
“We see China's steel output remaining under pressure until the end of Q1 2022, as authorities are keen to show a ‘green’ Winter Olympics in February,” Commonwealth Bank of Australia analyst Vivek Dhar said.
The benchmark 62%-grade iron ore's spot price had sunk 49% to $118.50 a tonne as of end-September, from record-high $232.50 on May 12, as Chinese demand collapsed.
Construction steel rebar on the Shanghai Futures Exchange SRBcv1 advanced 1.8%, while hot-rolled coil SHHCcv1 climbed 1.9%. Stainless steel jumped 4.7%.
Dalian coking coal added 0.6% and coke rose 1.9%.
China's Inner Mongolia region, its second-largest coal producer, has told 72 mines to boost annual output capacity by nearly 100 million tonnes amid record-high prices and electricity shortages.
Source: Reuters
Source: Reuters
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
Please Contact Us at: