Iron ore
futures edged higher on Monday, supported by hopes of further recovery in
demand in top consumer China and Beijing’s pledge to support its struggling
property market.
Gains, however, were limited as doubts lingered whether a
recovery in steel demand would meet expectations, and as portside stocks still
remained high.
The most-traded May iron ore contract on China’s Dalian
Commodity Exchange (DCE) ended daytime trade 0.3% higher at 842 yuan ($116.91)
a metric ton.
The benchmark April iron ore on the Singapore Exchange was flat
at $108.1 a ton, as of 0747 GMT.
China will further optimise property policy and effectively
motivate potential demands, state media cited Premier Li Qiang as saying at a
cabinet meeting on Friday, in the latest official call to prop up the ailing
property sector.
“There is expectation of rising ore demand amid improved steel
margins. It’s key to closely monitor how downstream steel demand actually recovers
in coming weeks as well as how steel prices move,” analysts at Sinosteel
Futures said in a note.
Steel and iron ore demand is expected to find some support from
“non-property sectors”, analysts at ANZ said in a note.
“Infrastructure investment should benefit from government
efforts to build out the country’s renewable energy sector,” they added.
Other steelmaking ingredients on the DCE lost ground, with
coking coal and coke down 0.51% and 1.24%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were broadly
lower. Rebar dropped 0.75%, hot-rolled coil ticked 0.42% lower, wire rod fell
0.28% and stainless steel shed 1.5%.
“Stocks of rebar will likely pile up further when more steel
mills resume production and the operating rate among construction sites has yet
to recover to a year-ago level,” analysts at Citic Futures said in a note.
($1 = 7.2024 Chinese yuan)
(By Amy Lv and Zsastee Ia Villanueva; Editing by Subhranshu Sahu
and Sherry Jacob-Phillips)