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China construction season seen boosting iron ore demand
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SGX benchmark May iron ore set to end Q1 above $120/T
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China steel curbs, regulatory risks cap iron ore gains
(Updates prices)
By Enrico Dela Cruz
March 31 (Reuters) - Dalian iron ore futures rose on
Friday and stayed on track for a second straight quarterly gain
on expectations of improved steel demand in China in the second
quarter, with tight supply concerns adding support.
The steelmaking ingredient has rebounded from October lows,
as the lifting of the zero-COVID policy and supportive measures
for the struggling property sector in China brightened economic
recovery and steel demand prospects for the world's biggest iron
ore consumer.
Expectations of improved Chinese demand particularly for
construction steel during the spring season and declining
portside iron ore inventory also boosted prices.
But global economic uncertainties and steel production
restrictions at home, along with Chinese regulators' warnings
against excessive price speculation, curbed iron ore's gains.
The most-traded May iron ore on China's Dalian Commodity
Exchange ended daytime trade 1.2% higher at 907 yuan
($132.13) a tonne, and stretched its quarterly gain to more than
6%.
On the Singapore Exchange, benchmark May iron ore was down 0.2% at $125.10 a tonne, as of 0714 GMT. However, it
was on track for a quarterly gain of roughly 10%.
"Iron ore prices continue to be up on signs of tighter
supply ahead of rising seasonal demand into China's peak
construction period," National Australia Bank analysts said in a
note.
But the strength in Chinese iron ore demand may wane in the
second half of the year, with China aiming to again reduce crude
steel output this year in line with its carbon emission
reduction goal, analysts said.
China's economic rebound also seems to be fragile.
"China's recovery is underway but appears uneven, with
infrastructure and manufacturing outperforming property and
consumption," Citi analysts said in a note.
Rebar on the Shanghai Futures Exchange rose 0.2%,
hot-rolled coil gained 0.5%, and wire rod added 0.2%, while stainless steel dipped 1.3%.
On the Dalian exchange, coking coal rose 1.8% and coke advanced 2.8%. (Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu)
