China iron ore futures turn higher, coke rises in resilient market

China’s iron ore futures prices recovered from early losses on Friday to end higher while coking coal and coke both closed up more than 3%, buoyed by resilient demand at steel mills despite signs of easier momentum for key construction products.

Steel product inventories in China, both held by traders and by mills, dropped for a 10th consecutive week and were down 3% from a week earlier at 13.07 million tonnes as of Dec. 24, data from the consultancy Mysteel showed.

Capacity utilisation rates at 247 blast furnaces across China jumped to 91.87% this week, the highest since Dec. 4, according to Mysteel.

The most traded iron ore futures on the Dalian Commodity Exchange DCIOcv1, for May delivery, ended up 2.0% at 1,063 yuan ($162.98) per tonne but were down 1.0% for the week, after six straight weeks of gains.

Spot 62% iron ore prices inched $0.5 higher to $166.5 per tonne on Thursday, according to SteelHome consultancy. SH-CCN-IRNOR62

Dalian coking coal futures DJMcv1 rose 3.5% to 1,689 yuan a tonne and coke DCJcv1 closed up 3.9% at 2,851 yuan a tonne.

Steel prices on the Shanghai Futures Exchange also fought their way off their early lows, with construction rebar SRBcv1 inching up 0.8% to 4,341 yuan a tonne by the close.

Hot rolled coil SHHCcv1, used in the manufacturing sector, had slipped 0.8% to 4,589 yuan a tonne at the close. It was down as much as 3.3% during the session.

“Affected by the pandemic situation and adjustments after profit-taking from the recent surge, ferrous prices had retreated significantly,” Huatai Futures wrote in a note, adding that overall fundamentals remained relatively positive.

FUNDAMENTALS

* Shanghai stainless steel futures SHSScv1, for February delivery, rose 2.3% to 13,690 yuan per tonne.

* China’s treasury bond issuance in 2021 will be similar to this year’s, if no special anti-virus bonds are sold, two sources briefed on the government’s plans said, suggesting a tighter fiscal policy since more bonds are due to mature next year.

Source: Reuters (Reporting by Min Zhang and Shivani Singh Editing by Edmund Klamann)