Iron ore futures stretched their gains into a fifth session on Friday, with the benchmark Dalian index hitting its highest in almost three weeks, after data showed Brazil’s exports of the steelmaking raw material shrank in December. Iron ore restocking ahead of the Lunar New Year holidays by steel mills in China, which makes half of the world’s steel supply, also continued to support spot and futures prices. The Dalian Commodity Exchange’s most-traded iron ore contract, with May expiry, rose as much as 1.8% to 667 yuan ($95.75) a tonne, its highest since Dec. 16, 2019. On the Singapore Exchange, the front-month February contract jumped 2.2% to $93.80 a tonne. Iron ore exports by Brazil, home to the world’s top producer Vale SA, dropped to 24.67 million tonnes in December from 27.25 million tonnes the month before and 33.20 million tonnes a year earlier, official data on Thursday showed. Iron ore’s availability remains a key concern for the market after the commodity rallied last year to five-year highs driven mainly by supply disruptions. Vale last month flagged reduced output in the first quarter of 2020 as safety checks involving its mining facilities continued following a tailings dam disaster in January last year. The light trading volumes, however, suggest that the price gains were mainly sentiment-driven, a Shanghai-based trader said. “We don’t see very strong demand for iron ore these days, but there’s good news that lifted market sentiment,” the trader said, referring to the latest monetary policy easing move by China’s central bank. The People’s Bank of China announced on Wednesday a reduction in the amount of cash that all banks must hold as reserves, freeing up more funds to shore up a slowing economy.
Source:https://in.reuters.com/article/asia-ironore