China’s iron ore futures hit over 10-mth high, steel prices rise
Prices of steel and steel-making raw materials in China rose on Friday, with iron ore climbing to a more than 10-month peak, amid optimism that the United States and China could soon resolve their festering trade dispute.
U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for Jan. 30, the Wall Street Journal reported on Thursday.
The most traded iron ore on the Dalian Commodity Exchange gained as much as 2.6 percent in early trade to hit 525 yuan ($77.48) a tonne, its highest since peaking at 531.4 yuan on March 5 last year.
“The easing trade tension seems to help support the iron ore market, with futures rising in China,” ANZ Research said in a note.
Helen Lau, metals and mining research analyst at Argonaut Securities in Hong Kong, said the positive news concerning the trade war also lifted sentiment towards other assets.
Resolving the trade dispute would mean “everything will be back to normal, and demand (for steel) will be coming back, and that will support iron ore price,” she said.
The most-active rebar contract on the Shanghai Futures Exchange rose as much as 2.2 percent to 3,628 yuan a tonne, its highest so far after hitting 3,674 yuan on Nov. 6 last year.
Hot rolled coil jumped to as high as 3,525 yuan, up 2.1 percent.
Coking coal was up 0.9 percent at 1,239.5 yuan a tonne as of 0218 GMT. Coke was at 2,066 yuan, up 1.6 percent.
Spot iron ore for delivery to China SH-CCN-IRNOR62 edged up 0.4 percent at $75.10 a tonne on Thursday, according to SteelHome consultancy.
Ahead of Friday’s trading, global miner Rio Tinto said it expected to produce more iron ore in 2019 in a target range that was at the lower end of analyst expectations, after logging a slight drop in quarterly iron ore production in December.
Iron ore prices have largely been supported this week after Rio Tinto, the world’s No. 2 miner of the steelmaking material, declared force majeure on shipments to some customers following a fire at its Cape Lambert export terminal in Australia.
Source: Reuters (Reporting by Enrico dela Cruz; Editing by Rashmi Aich)