The most-traded May iron ore on China's Dalian Commodity Exchange ended morning trade 1.7% higher at 881.50 yuan ($128.13) a tonne. It climbed 1.3% in the previous session, snapping a seven-session slump. On the Singapore Exchange, benchmark April iron ore was up 1.1% at $121.85 a tonne, as of 0520 GMT. Regional U.S. lender First Citizens BancShares scooped up assets of failed U.S. lender Silicon Valley Bank on Monday, triggering a relief rally in financial markets fearing a deeper banking sector turmoil. Analysts, however, said worries about a global credit crunch that could curb economic growth and metals demand, along with steel mills' low-inventory strategy, production restrictions and regulatory risks in China, will likely keep iron ore gains in check.
A weak property market in China, a major demand driver for steel, is also expected to keep sentiment subdued, they said. In the meantime, any decline in iron ore prices may also be limited, especially with port stockpile in China at its lowest level since early February, based on SteelHome consultancy data. "The market remains sensitive to near term moves in port inventory," National Australia Bank analysts said in a note. Rebar on the Shanghai Futures Exchange rose 0.8%, hot-rolled coil edged up 0.4%, wire rod climbed 1.8%, and stainless steel added 0.2%. Other steelmaking inputs on the Dalian exchange dipped, however, with coking coal and coke down 0.6% and 1.4%, respectively.
(Reporting by Enrico Dela Cruz in Manila; Editing by Nivedita Bhattacharjee)
