The iron ore price rose on Tuesday on growing hopes of a recovery for steel demand in China.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $129.17 a tonne during morning trading, up 3.2% compared to Monday’s closing.
Benchmark iron ore futures on the Dalian Commodity Exchange ended up 2.8% to 724 yuan per tonne.
“Domestic stainless steel firms are stepping up maintenance in the first quarter, while affected by the Spring Festival holidays and Beijing Winter Olympics; overall production is expected to be limited,” analysts with Jinrui Futures wrote in a note.
The most-actively traded stainless steel contract on the Shanghai Futures Exchange, for February delivery, jumped as much as 5.3% to 17,920 yuan ($2,812.39) per tonne, closing up 4.4% at 17,760 yuan a tonne.
The China Iron and Steel Association said on Monday China’s 2021 crude steel output was expected to fall to 1.03 billion tonnes from a record of 1.065 billion tonnes, reaching a “supply and demand balance.”
“There’s still room for profits at long-process steel producers to gain, and expectation on resuming steel production and restocking demand before holidays could shore up iron ore prices,” said analysts at Huatai Futures.
(With files from Reuters)