Iron ore price rose on Thursday on expectations of a recovery in Chinese demand after the Beijing 2022 Olympics next month.
Top steel producer China is expected to maintain output restrictions to ensure clean air during the Games.
“After the Winter Olympics, there is an opportunity to relax the production limit (for steel),” analysts at Zhongzhou Futures said in a note.
But they said China could see an iron ore surplus of 15 million tonnes this year given depressed steel demand in the country’s property sector and production controls to curb emissions.
Chinese developers had an annual drop in property sales in 2021 for the first time since 2016. The hundred largest developers in China sold homes worth 11.1 trillion yuan ($1.7 trillion) last year, down 3.5% compared to 2020, according to China Real Estate Information Corp.
The most-active iron ore for May delivery on China’s Dalian Commodity Exchange ended daytime trading 4.1% higher at 717 yuan ($112.47) a tonne, near a session high of 717.50 yuan, its strongest since Oct. 27.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $127.58 a tonne during morning trading, up 2.4% compared to Wednesday’s closing, the highest since Oct. 11.
Related read: Top iron ore stories of 2021 and what to expect in 2022
(With files from Reuters and Bloomberg)