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Iron ore gains for the fourth consecutive week on increased steel demand

Iron ore gains for the fourth consecutive week on increased steel demand

The price of iron ore futures rose on Friday. They ended the week with a higher price, boosted by a strengthening steel market and pre-holiday stocking in China, whose major consumer.

The January contract for iron ore most traded on China's Dalian Commodity Exchange rose by 0.81%, to 807.5 Yuan ($113.54) per metric ton. The contract finished the week with a gain of 0.88%.

As of 0716 GMT the benchmark September iron ore traded on the Singapore Exchange had risen 0.27% to $105.55 per ton, but was down 0.14% over the past week.

The steel sector is benefiting from the continued support of the iron metals industry as the peak season approaches. Restocking in advance of the Chinese National Day holiday also helps to boost the demand for ferrous materials. Steel prices may rise if downstream demand is stronger than expected in October. This was predicted by broker Galaxy Futures.

According to Mysteel's data, China's stocks of major carbon steels declined by 0.3% from the previous week during September 12-18 to 4,18 million tons.

According to Hexun Futures, a Chinese financial information website, the average daily hot metal production, an indicator for iron ore consumption, increased by 171,900 metric tons in comparison to a year ago. The capacity of blast furnaces was also utilised at 93,35 %, up 6.29 percentage points.

The National Bureau of Statistics reported that China, the world's largest producer of crude iron ore, increased its production by 8.8% in August, to 81.63 millions tons. Meanwhile, crude steel output fell for a third consecutive month due to a slowing demand.

Coking coal and coke, which are used to make steel, have both gained in value, rising by 1.36% each and 0.75% respectively.

The benchmarks for steel on the Shanghai Futures Exchange are mostly in positive territory. Rebar rose 0.73%. Wire rod increased 0.09%. Hot-rolled coils rose 0.18%. Stainless steel fell 0.39%. $1 = 7.1118 Chinese yuan (Reporting and editing by Eileen Soreng; Lucas Liew)

(source: Reuters)