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China iron ore surges over 6%, logs fifth straight weekly gain

Iron ore futures in China soared more than 6% on Friday and marked the fifth continuous weekly gain fuelled by rising production at steel mills and supply concerns in Brazil due to the coronavirus pandemic.

Capacity utilisation rates at blast furnaces in 247 mills across China, tracked by Mysteel consultancy, rose to 91.38% from 90.49%, as of Friday.

“High steel production level will sustain for a while, and portside inventories are still low, and will prop up and stimulate iron ore prices,” Huatai Futures said.

The most traded iron ore futures on the Dalian Commodity Exchange, for September delivery, jumped as much as 6.7% to 754 yuan ($105.50) per tonne, before closing up 6.4% to 752 yuan.

The contract gained 5.0% for the week.

Prices also increased amid supply worries in Brazil. The country reported a daily record of 26,417 new coronavirus cases on Thursday, bringing its total tally to 438,238, second only to the United States in confirmed cases.

Construction steel rebar on the Shanghai Futures Exchange, for October delivery, rose 2.5% to 3,579 yuan per tonne.

Hot-rolled coils, used in cars and home appliances, closed up 3.2% to 3,542 yuan per tonne.

FUNDAMENTALS
* Dalian coking coal edged up 0.2% to 1,162 yuan per tonne and coke rose 0.9% to 1,877 yuan per tonne.

* Stainless steel futures fell 0.5% to 12,955 yuan per tonne.

* Fortescue Metals Group Ltd said on Friday it has been refused leave to appeal a court decision that gave an Aboriginal group exclusive title rights to land at its Solomon Hub iron ore mine in the Pilbara region of Western Australia.

* Spot prices of iron ore with 62% iron content for delivery to China was unchanged from previous session at $97 a tonne on Thursday.
Source: Reuters (Reporting by Min Zhang and Tom Daly, Editing by Sherry Jacob-Phillips and Shounak Dasgupta)

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