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Dalian iron ore extends gains, SGX price stays above
$120/T
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Supply concerns, China steel demand lend support to iron
ore
(Updates prices)
By Enrico Dela Cruz
March 29 (Reuters) - Dalian iron ore futures extended
their gains to a third session on Wednesday, underpinned by
prospects of tighter supply of the steelmaking ingredient and
optimism over steel demand in China.
The most-traded May iron ore on China's Dalian Commodity
Exchange ended daytime trade 1.5% higher at 890.50
yuan ($129.26)a tonne.
On the Singapore Exchange, however, the most-active May iron
ore contract was little changed at $121.30 a tonne, as
of 0717 GMT, after three straight sessions of gains.
Wednesday's session reflected mixed sentiment, with
traders expecting steel demand to rise during the spring
construction season in China, while domestic steel production
restrictions and regulatory risks are seen weighing on prices.
China is considering cutting its crude steel output by about
2.5% this year, Reuters has reported citing two sources familiar
with the matter, as it extends a two-year-old policy to reduce
emissions by the world's biggest steel producer.
At the moment, "iron ore consumption is supported by rigid
demand", Huatai Futures analysts said in a note.
Lending further support to iron ore prices, port stockpile
of the commodity in China hit its lowest since early February
last week, based on SteelHome consultancy data ,
while daily exports from Brazil have been down so far this
month.
Huatai analysts said traders were mindful of the fact that
Chinese regulators had been paying "high attention" to elevated
iron ore prices, warning repeatedly against excessive market
speculation and hoarding.
Rebar on the Shanghai Futures Exchange added 0.7%,
hot-rolled coil gained 0.8% and wire rod climbed 0.9%, while stainless steel fell 1.5%.
On the Dalian exchange, coking coal was up 0.5%,
but coke dipped 0.6%.
Sentiment was generally upbeat ahead of the China
manufacturing purchasing managers' index data due on Friday, as
traders await more evidence of economic recovery.
(Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu
Sahu and Louise Heavens)
