Iron ore prices seesawed on Monday, as expectations of restocking by Chinese steelmakers following a week-long holiday were countered by the prospect of increased supply.
The benchmark November iron ore on the Singapore Exchange was up 0.56% at $91.1 a metric ton, as of 0704 GMT.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) gave up earlier gains to end daytime trade down 0.07% at 683 yuan ($102.07) a ton.
Prices of the key steelmaking ingredient fell last week as subdued demand and expectations of rising supply weighed on the market.
Restocking during the three working days from October 8-10 following China’s week-long National Day holiday fell short of expectations, as some mills remained cautious about replenishing feedstocks amid thin margins.
However, more mills are expected to return to the spot market this week to build feedstock inventories to sustain production, which could support iron ore prices.
A decline in spot coke prices helped narrow steelmakers’ losses, potentially slowing production cuts, analysts at broker First Futures said in a note.
Lower steel production losses would also support feedstock prices.
Still, gains were capped by prospects of increased supply in the fourth quarter, as miners ramp up shipments to meet quarterly and annual targets.
Futures prices of coking coal and coke, other steelmaking ingredients, gained 1.88% and 1.53%, respectively, helped by sustained worry over slow supply recovery.
Several mines were closed due to stringent safety checks following a deadly mine accident in northern China’s Shanxi in May.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar advanced 0.32%, hot-rolled coil added 0.12%, while stainless steel lost 0.89%.
($1 = 6.6918 Chinese yuan)
(Reporting by Amy Lv and Lewis Jackson; Editing by Subhranshu Sahu and Jochelle Mendonca)
