Iron ore prices jumped to a seven-week high on Friday and were set for a fourth straight weekly gain, on growing hopes of a recovery in steel demand in China.
The optimism around the key steelmaking ingredient, however, continued to be tempered by China’s rising stockpiles of imported iron ore hitting 156 million tonnes last week, the highest level since July 2018.
Iron ore’s most-traded May contract on China’s Dalian Commodity Exchange ended daytime trade 1.9% higher at 676.50 yuan ($106.21) a tonne, after earlier touching 696.50 yuan, its strongest since Oct. 28.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $119.60 a tonne during afternoon trading, up 2.6% compared to Thursday’s closing.
In general, commodity markets were normalizing after seeing wild moves triggered by power shortages and shifting regulatory policies in China, according to ANZ commodity strategists.
“For the steel market, in particular, the stabilising construction activity in China also helped lift the overall mood. This supports steel demand, though the backdrop remains challenging for iron ore until February 2022,”
(With files from Reuters)