Easing COVID-19 restrictions in Shanghai and scrapped or relaxed
testing mandates in several Chinese cities also buoyed markets battered over
the last two weeks amid concerns over weak demand in the world's biggest steel
producer.
The
most-traded September iron ore on China's Dalian Commodity Exchange ended
daytime trade 4% higher at 775 yuan ($115.92) a tonne, after earlier touching
782.50 yuan, its highest since June 20.Dalian and Singapore iron ore futures hit one-week highs on
Monday, supported by hopes that Chinese steelmakers would restart dozens of blast furnaces idled
due to slumping margins and weak demand to replenish inventories.
Easing COVID-19 restrictions in Shanghai and
scrapped or relaxed testing mandates in several Chinese cities also buoyed
markets battered over the last two weeks amid concerns over weak demand in the
world's biggest steel producer.
The most-traded September iron ore on China's
Dalian Commodity Exchange ended daytime trade 4% higher at 775 yuan ($115.92) a
tonne, after earlier touching 782.50 yuan, its highest since June 20.
On the Singapore
Exchange, the steelmaking ingredient's front-month July contract climbed up to
5.7% to $120.60 a tonne, its strongest since June 20.
Dalian iron ore had tumbled 22% in a record
10-session sell-off until June 23, while SGX iron ore had slumped to its
weakest close this year at $108.14 a tonne on Thursday -- dragged down by a
slowing steel production in China.
The market panic seen last week has eased,
Sinosteel Futures analysts said in a note. Limited steel production is expected
to help reduce high inventories, they said, and "the reduction in supply
will help prices to stop falling".
But the overall outlook for China's ferrous
complex has not changed fundamentally, analysts said.
China's strict zero-COVID protocols will keep
lockdown risks high, while weather conditions unfavourable to construction
projects are also a concern.
"Weaker consumption and negative COVID
headlines should keep a lid on iron ore futures this week," said Atilla
Widnell, managing director at Navigate Commodities in Singapore.
Construction steel rebar on the Shanghai Futures
Exchange , which tumbled on June 20 to a near seven-month low, rose 1.1%, while
hot-rolled coil climbed 1.2%. Stainless steel fell 3.3%.