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The price of iron ore is rising on the hope that China will demand more.

Iron ore futures prices rose for the third consecutive session on Thursday. This was aided by expectations of improved demand in China, but rising steel inventories fueled concerns about the pace of resumption of steel production, limiting gains.

By 0315 GMT, the most-traded iron ore contract for January on China's Dalian Commodity Exchange rose 0.39%, to 781.5 Yuan ($109.26), per metric ton.

The benchmark iron ore for October on the Singapore Exchange rose 0.69% to $103.95 per ton, the highest since August 29.

Yingguang Wang said that some steelmakers were planning to resume production and increase raw material procurement on Thursday, according to a note written by an analyst from Lange Steel the day before.

Steel mills at the top Chinese steelmaking center Tangshan had to reduce production temporarily to improve air quality in preparation for a military display in Beijing to mark the end of World War Two on September 3. This temporarily weakened ore demand.

Bright Futures reported that inventories of construction steel continue to increase, which puts pressure on the prices.

Steel stocks are likely to rise and the demand for steel may be low. This could prevent mills from quickly restarting production.

Analysts at Yongan Futures stated that portside stocks would be expected to keep price increases in check.

Coke and coking coal, which are used to make steel, have fallen by 3.09% and 2.46 %, respectively.

The benchmarks for steel on the Shanghai Futures Exchange are stagnant. Rebar fell 0.35%; hot-rolled coil slipped 0.06%; stainless steel dipped 0.39%, while wire rod rose 0.43%. ($1 = 7.1529 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)

(source: Reuters)