December 17, 2018 / 2:23 AM / 5 months ago

Dalian iron ore hits 4-week high on low inventory, restocking demand hopes

* Ports’ iron ore inventory at 137.1 mln T vs 143.57 mln T in 2017 - SteelHome

* Mills’ imported ore stocks lowest since Nov. 2017 - Mysteel

* Utilisation rates at mills at 65.75 pct last week - Mysteel

BEIJING, Dec 17 (Reuters) - China’s Dalian iron ore futures rose to a nearly four-week peak on Monday, buoyed by tight supply amid low inventory at ports and expectations of restocking demand at steel mills ahead of the holiday season.

Benchmark iron ore contract on the Dalian Commodity Exchange rose to as high as 492 yuan ($71.30) a tonne when market opened, a level last seen on Nov. 22. It was up 1.5 percent to 488 yuan a tonne as of 0203 GMT.

Stocks of the steelmaking ingredient at China’s major ports added 900,000 tonnes last week to 137.1 tonnes as of Dec.17, SteelHome data showed, but it is still much lower than 143.57 million tonnes in the same period last year.

“With falling shipments from miners... fundamentals of iron ore have improved a lot... Iron ore prices are expected to rise alongside the rebound of steel prices,” said analysts from Huatai Futures in a note, adding, steel mills would soon start their restocking process ahead of the Chinese New Year.

China will celebrate its week-long national festival in early February 2019.

Imported iron ore inventory at 64 sampling steel mills across China last week dipped to its lowest level since early November 2017, according to data tracked by Mysteel consultancy.

However, analysts also warn that the strengthening environmental measures might rein in iron ore demand in the near term.

Major steelmaking city of Tangshan and Xuzhou have asked steel mills to curtail more output in the remaining time in December as city officials are concerned they may not meet their pollution reduction targets for the year.

Steel mills in Tangshan were ordered to step up average production curbs to 40 percent from 30 percent, while Xuzhou plans to shut down all its mills.

Weekly utilisation rates at steel mills across China continued to dip last week from prior week, down 0.13 percentage points to 65.75 percent, with the rate in Tangshan city to its lowest level in four months at 58.1 percent, Mysteel data showed.

The most-active construction steel rebar futures on the Shanghai Futures Exchange lost 0.1 percent after rose as much 1.3 percent in the early trading session.

Prices of other steelmaking raw materials also mostly went up amid tightening environmental policies.

Dalian coke futures rose 0.7 percent to 2,033.5 yuan a tonne, while coking coal prices edged 0.2 percent lower to 1,247 yuan.

$1 = 6.9004 Chinese yuan Reporting by Muyu Xu and Dominique Patton; Editing by Rashmi Aich

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below