Iron ore futures set for weekly gain on upbeat demand, Brazil supply concerns

Benchmark iron ore futures in China dipped on Friday, though the market was on course for a near 2% weekly gain buoyed by sustaining demand at mills and concerns over supply from Brazil.

The most actively traded iron ore contract on the Dalian Commodity Exchange DCIOcv1, for September delivery, eased 0.2% to 761 yuan ($107.38) per tonne by 0215 GMT.

Spot prices for iron ore with 62% iron content for delivery to China fell by $0.5 to $104.5 a tonne on Thursday.

Fitch Solutions expects iron ore rallies could roll on in the coming months as mills in China are gearing up in tandem with the country’s economic recovery.

“We expect steel production to ramp up and average 5% year-on-year growth in 2020, buoying demand for iron ore,” Fitch Solutions wrote in a note.

Capacity utilisation rates at blast furnaces in 247 mills in China continued to grow to 92.35% this week, data compiled by consultancy Mysteel showed on Friday.

Construction rebar on the Shanghai Futures Exchange SRBcv1, for October delivery, rose 0.5% to 3,609 yuan a tonne.

Hot-rolled coil SHHCcv1, used in the manufacturing sector, jumped 0.7% to 3,562 yuan a tonne.
FUNDAMENTALS

* Dalian coking coal DJMcv1 dipped 0.1% to 1,181 yuan a tonne.

* Dalian coke DCJcv1 dropped 0.5% to 1,953 yuan per tonne.

* The most traded August contract for stainless steel on the Shanghai exchange SHSScv1 down 0.9% to 12,730 yuan a tonne.

* Western Australia approved BHP Group’s application to disturb 40 culturally significant Aboriginal sites as part of a mine expansion, the state government said on Thursday, days after Rio Tinto blew up sacred rock caves in the same area.
Source: Reuters (Reporting by Min Zhang and Tom Daly, Editing by Sherry Jacob-Phillips)