Latest News

Dalian Iron Ore to see weekly gains due to resilient China demand

Dalian Iron Ore to see weekly gains due to resilient China demand

The prices of Dalian Iron Ore Futures rose on Friday, and are poised to make modest gains for the week on a resilient demand in China for this steelmaking ingredient. This is outweighing a persistent decline in China's real estate market.

As of 0245 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was up 1.36% to 706 yuan (98.31 dollars) per metric ton.

This week, the contract has gained 0.57%.

The benchmark July Iron Ore traded at the Singapore Exchange 1.42% higher, at $94 per ton. However, it has fallen 0.22% for the entire week.

According to Mysteel, the operating rate of China's blast furnaces increased by 0.4% in the last week to 83.82%.

Mysteel data showed that hot metal production, which is a measure of iron ore consumption, increased 0.24% from week to week, reaching 2.422 millions tons as of 20th June.

Galaxy Futures, a broker, said: "While the demand is resilient right now, market traders are primarily focused on whether or not off-season demand continues to be factored into trading."

Construction in China peaks during the spring, before the rainy season begins.

Analysts at ANZ say that meaningful growth in steel and ore demand will not be possible until the new construction activity increases.

Official data released on Monday showed that China's new house prices dropped in May, continuing a stagnation of two years.

Goldman Sachs projected late Monday that demand for new homes will remain below the 2017 market peak in the coming years. This suggests a property slump in the second largest economy in the world.

Coking coal and coke, which are used to make steel, have both gained in price, rising by 2.23% and 2.5% respectively.

The Shanghai Futures Exchange saw a significant increase in the steel benchmarks. The rebar price rose by 0.57%. Hot-rolled coil, wire rod, and hot-rolled sheet all gained 0.7%. Stainless steel fell by 0.32%. $1 = 7.1812 Chinese Yuan (Reporting and editing by Sherry Jab-Phillips).

(source: Reuters)