Iron ore price reversed course to trade higher on Thursday, as data showing higher steel output lifted sentiment. Benchmark 62% Fe fines imported into Northern China rose 0.54%, to $127.70 per tonne.
The most-traded May iron ore futures contract on China’s Dalian Commodity Exchange ended daytime trading 0.6% higher at 916.5 yuan ($131.45) a tonne.
The output of five major steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil, and medium plate grew by 49,000 tonnes from the previous week to around 9.52 million tonnes as of March 9, data from consultancy Mysteel showed.
“The gains seen in the afternoon are mainly because sentiment improved on the better-than-expected increase in the apparent demand of rebar,” said a Beijing-based analyst who is not authorized to speak to the media.
The downstream steel demand has been continuously recovering, lending persistent support to the ferrous market in the short run, said Yu Chen, a Shanghai-based senior iron ore analyst at Mysteel.
“We believe fundamentals (of the ferrous market) will be stable or in line with expectations in the short term. And the hot metal output will gradually peak in March,” said Yao Xinying, a Shanghai-based research director of the ferrous market at consultancy SMM.
(With files from Reuters)