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Dalian iron ore stabilises after rout, China imports rise

Iron ore futures in China ticked higher on Monday, stabilising after last week’s equities-driven rout that pulled prices to a record low.

Aiding sentiment, China’s imports of the steelmaking raw material rose 6 percent in June from the previous month, reflecting efforts by big, low-cost miners from Australia and Brazil to boost output and ship more to their top market.

Iron ore for September delivery on the Dalian Commodity Exchange was up 0.4 percent at 370.50 yuan ($60) a tonne by midday. The most-traded contract dropped to as low as 333 yuan per tonne on July 9, dragged by steep losses in Chinese equities.

“Iron ore prices dropped too fast last week, but we see that Chinese steel mills’ demand for the raw material remains,” said a Shanghai-based trader.

China imported 74.96 million tonnes of iron ore in June, up from 70.87 million tonnes in May, government data showed.

Yu Yang, analyst with Shenyin and Wanguo Futures in Shanghai, expects imports to rise further during the current quarter as miners boost shipments in line with increased output.

Iron ore for immediate delivery to China’s Tianjin port climbed 3.3 percent to $49.90 a tonne on Friday, according to The Steel Index, recovering from a decade-low of $44.10 reached earlier in the week.

The spot benchmark still ended last week in the red, albeit trmming its decline to 7.8 percent from nearly 11 percent the week before.

“We view the upside in iron ore prices as limited due to weak demand and weak steel prices,” ANZ Bank said in a note.

Shanghai steel futures fell again on Monday after recovering some lost ground following last week’s slide to their lowest since their 2009 launch.

The most-active October rebar contract on the Shanghai Futures Exchange was down 0.7 percent at 2,019 yuan a tonne, after falling as far as 2,000 yuan earlier.
Source: Reuters