June 19, 2020 / 4:23 AM / 22 days ago

China iron ore set for 7th weekly rise on brisk demand, but rally falters

* Dalian iron ore ends morning trade up 0.1%

* SGX iron ore up 0.3%, spot price near 10-month high

* China iron ore port stocks shrink further - Mysteel

By Enrico Dela Cruz

MANILA, June 19 (Reuters) - Dalian iron ore futures were poised to log their seventh straight weekly gain, as spot prices stayed near 10-month highs supported by demand for the steelmaking raw material, despite another volatile session on Friday.

The most-traded iron ore for September delivery on the Dalian Commodity Exchange ended the morning session up 0.1% at 767.50 yuan ($108.31) a tonne, and was on track to rise less than 1% this week.

On the Singapore Exchange, the July contract rose 0.6% to $100.67 a tonne.

The Dalian benchmark contract gained more than 30% in the second quarter, with falling stockpiles of imported iron ore at ports of the world’s top consumer of the commodity also supporting prices.

Iron ore inventories at China’s 45 major ports fell for the ninth week in a row over June 12-18 to about 106 million tonnes, according to consultancy Mysteel’s latest survey.

However, iron ore’s rally appeared to be losing steam as signs of weakening demand have emerged, such as the slowing decline in port stocks, analysts said.

Worries about fresh COVID-19 cases in China have also tempered market optimism about demand staying brisk.

Although a Chinese medical expert has assured that Beijing has brought its latest outbreak under control, reports of new infections outside the capital kept investors cautious, including a reported case in northern Tianjin city, home to some steel mills.

“A lockdown in Tianjin could cause a significant pullback in iron ore prices,” analysts at SP Angel said in a note.


* Construction steel rebar on the Shanghai Futures Exchange rose 0.8%, while hot-rolled coil climbed 1.5%.

* Stainless steel jumped 2.9% amid strong domestic demand for raw material nickel ore.

* Coking coal was trading flat, but coke gained 0.7%.

($1 = 7.0860 yuan)

Reporting by Enrico dela Cruz, Editing by Sherry Jacob-Phillips

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