China's iron ore futures rose in early trade on Tuesday, rebounding from a three-session slump on worries over possible disruption in shipments of the steelmaking raw material from top supplier Australia, where the cyclone season has begun. The Dalian Commodity Exchange's most-traded iron ore contract, with May expiry, gained 1.5% to 667.50 yuan ($97.05) a tonne. On the Singapore Exchange, the front-month April contract jumped 1.2% to $91.40 a tonne. "Investors are watching the supply risks surrounding cyclones in Australia," ANZ Research analysts said in a note. A severe tropical cyclone named Claudia was moving over open waters to the northwest of the Pilbara, Australia's key iron ore-producing region, according to the nation's weather bureau. Claudia, though, was likely to start weakening later on Tuesday, it said. Imported iron ore inventory at China's ports was estimated at 127.90 million tonnes, as of Jan. 10, the lowest since mid-December last year, based on data tracked by SteelHome consultancy.
Concerns over demand prospects in the near term, however, kept iron ore futures' gains in check."China has asked steel mills in some regions to cut output in the immediate term to curb pollution," ING analysts said in a note. "Limited details are available at the moment, but the news may weigh on the iron ore market in the short term." Also clouding the outlook for iron ore demand in the world's top steel producer, the China Iron and Steel Association has vowed to strictly prohibit new steel capacity addition in 2020, according to state-backed China Metallurgical News. The spot price of benchmark 62% iron content ore for delivery to China was steady at $94.70 a tonne on Monday, SteelHome data showed.
Source:https://www.todayonline.com/world