Iron ore futures prices held well over the key psychological level of $100 a metric ton on Tuesday, while investors closely monitored the renewed Sino-US trade talks for signs of progress.
The benchmark September iron ore on the Singapore Exchange climbed 1.9% to $102.7 a ton, as of 0700 GMT.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) erased the morning’s loss to end daytime trade 0.63% higher at 798 yuan ($111.17) a ton.
Talks between top US and Chinese officials in Stockholm, who met on Monday, are expected to continue on Tuesday to resolve longstanding economic disputes between the world’s top two economies.
Although the two superpowers have no deep ties in terms of direct trade in steel and its key feedstock iron ore, trade frictions could blur demand outlook in top consumer China, said analysts.
Underpinning iron ore prices were also falling arrivals, with those at the major ports slipping by 7.6% week-on-week to 23.2 million tons in the week as of July 27, data from consultancy Mysteel showed.
“Fundamentals of iron ore are relatively healthy amid falling arrivals and resilient hot metal output, supporting prices,” analysts at Shengda Futures said in a note.
Markets also awaited details of a Chinese Politburo meeting by July-end that is expected to set the country’s economic policy for the rest of the year.
Prices of coking coal and coke, also steelmaking ingredients, extended their slump for a second straight session, falling 6.63% and 2.62%, respectively.
Both had surged in the past week, fueled by the anticipation of a potential supply cut after the government planned to inspect mines at eight key coal production hubs to check for excess production.
Most steel benchmarks on the Shanghai Futures Exchange gained. Rebar added 1.98%, hot-rolled coil rose 2.01%, wire rod advanced 2.33%while stainless steel lost 0.12%.
($1 = 7.1780 Chinese yuan)
(By Amy Lv and Lewis Jackson; Editing by Harikrishnan Nair and Janane Venkatraman)
