MANILA (Reuters) - Dalian iron ore futures booked their seventh straight weekly gain on Friday, despite another volatile session, as spot prices stayed near 10-month highs supported by strong demand for the steelmaking raw material.
Iron ore on China’s Dalian Commodity Exchange closed up 0.1% at 768 yuan ($108.55) a tonne, and rose 0.7% this week. The most-traded contract on the Singapore Exchange gained 0.2% to $100.27 in afternoon trade.
The Chinese benchmark contract has gained 34% this year, buoyed by falling port iron ore stockpiles in top consumer China, and brisk demand underpinned by Beijing’s infrastructure development push to support the economy.
Iron ore inventories at China’s 45 major ports fell for the ninth consecutive week over June 12-18 to about 106 million tonnes, according to consultancy Mysteel’s latest survey.
Citing data from 46 Chinese ports, SteelHome consultancy reported a slight rebound in stockpiles this week, although the level still hovers near the lowest since October 2016.
Nevertheless, iron ore’s rally appeared to be losing steam, with the seasonal weakness in domestic steel demand, as the rainy season in southern regions is set to slow construction activity, and the latest coronavirus outbreak fanning caution.
While a Chinese medical expert has assured that Beijing has brought its latest outbreak under control, a case in northern Tianjin city, home to some steel mills, has been reported.
“A lockdown in Tianjin could cause a significant pullback in iron ore prices,” analysts at SP Angel said in a note.
Reporting by Enrico dela Cruz, Editing by Sherry Jacob-Phillips