* Dalian iron ore up 1.0%; SGX iron ore dips 1.3%
* Iron ore port stocks lowest since Oct 2016 - SteelHome
* China May crude steel output rises 8.5% from April
By Enrico Dela Cruz
MANILA, June 15 (Reuters) - China’s iron ore futures rose on Monday as spot prices hovered near 10-month highs supported by falling portside stockpiles, but gains were capped by signs of weakening local demand for steel products.
The Dalian Commodity Exchange’s most-traded September iron ore closed the morning session up 1.0% at 770 yuan ($108.63) a tonne. Most-active July iron ore on the Singapore Exchange, however, fell 1.3% to $100.86 a tonne.
Imported iron ore stocked at China’s ports dropped to 107.75 million tonnes last week, the lowest since October 2016, SteelHome consultancy data showed. SH-TOT-IRONINV
The further decline in portside inventory showed Chinese steel mills’ strong demand for iron ore as they continued to ramp up production, with crude steel output rising 8.5% in May from a month earlier.
In the first five months of the year, China’s crude steel output rose 1.9% from same period in 2019.
But latest weekly data showed that destocking of steel products has slowed, Sinosteel Futures Co Ltd analysts wrote in a note.
“In the short term, the output may remain high, and small growth may still occur, but the probability of a substantial increase in production is weak when demand is weak,” they said.
Initial data, meanwhile, showed Australia may ship a record volume of iron ore this month, while Brazilian shipments may have rebounded, said Howie Lee, economist at OCBC in Singapore.
“That shows China’s persistent voracious appetite for iron ore but also signifies that Brazilian supply lines may be returning to normal,” he said.
* Construction steel rebar on the Shanghai Futures Exchange slipped 0.3%, while hot-rolled coil was virtually flat. Stainless steel dipped 1.1%.
* Coking coal slumped 0.6% but coke gained 0.3%.
* Benchmark spot 62% iron ore settled at $105 a tonne on Friday, SteelHome data showed. SH-CCN-IRNOR62
($1 = 7.0880 yuan)
Reporting by Enrico dela Cruz; Editing by Rashmi Aich