Iron ore price set for best week in 11 on China demand prospects
Iron ore resumed its rally in Singapore on Friday, putting it on track for its biggest weekly gain in 11 weeks, as policy support for China’s faltering economic recovery and optimism over its near-term demand prospects underpinned prices.
The steelmaking ingredient’s Chinese benchmark was also poised to post its biggest weekly gain since June, ahead of a seasonal pick-up in domestic construction activity from September to October.
“As we enter the seasonally bullish Sept/Oct onshore season we are of the opinion dips will find support,” Al Munro at broker Marex said in a note.
Iron ore’s benchmark September contract on the Singapore Exchange was up 2% at $114.15 per metric ton, as of 0700 GMT, after Thursday’s 1.2% decline that followed a five-session rally. It has gained more than 6% this week.
The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade 0.5% higher at 827 yuan ($113.49) per ton, after swinging back and forth.
Spot iron ore has also climbed more than 6% this week, trading at a four-week high of $116.50 on Thursday, SteelHome consultancy data showed.
Support for iron ore was intact despite a Mysteel consultancy report saying some mills in China’s steelmaking hub of Tangshan city have suspended sintering operation for one week from Aug. 24 as required to improve air quality.
Top iron ore consumer China is aiming to achieve a supply and demand balance in its steel market this year, according to the industry ministry, even as steelmakers face mounting pressure from a floundering economy and property market distress.
Other steelmaking ingredients on the Dalian exchange fell following recent gains, with coking coal and coke down 1.2% and 0.7%, respectively.
Steel benchmarks in Shanghai were subdued. Rebar fell 0.5%, hot-rolled coil dropped 0.4% and stainless steel lost 0.8%, while wire rod added 0.1%.
