China’s iron ore futures have risen, rebounding from a three-session slump on worries over possible disruption in shipments of the steelmaking raw material from top supplier Australia, where the cyclone season has begun.
The Dalian Commodity Exchange’s most-traded iron ore contract, with May expiry, ended 2.1 per cent higher at 671.50 yuan ($US97.60) a tonne.
On the Singapore Exchange, the front-month February contract extended gains, rising 1.5 per cent in afternoon trade.
“Investors are watching the supply risks surrounding cyclones in Australia,” ANZ Research analysts said in a note.
A severe tropical cyclone named Claudia was moving over open waters to the northwest of the Pilbara, but was not expected to make landfall, according to a Bureau of Meteorology forecast issued on Wednesday.
Supply-side concerns buoyed iron ore prices as inventory of the material at China’s ports had fallen for two straight weeks to 127.90 million tonnes, as of January 10, the lowest since mid-December last year, based on SteelHome consultancy data.
Port stocks shrank as steel mills continued to boost their stocks ahead of the Lunar New Year holidays later this month.
The spot price of benchmark 62 per cent iron-content ore for delivery to China was steady at $US94.70 a tonne on Monday, SteelHome data showed.
China’s iron ore imports rose 0.5 per cent in 2019 to 1.069 billion tonnes, just below the 2017 record peak, on strong demand at steel mills and the recovery in shipments from big miners after disruptions earlier in the year.
China’s appetite for high-grade iron ore this winter looks set to drop from the peaks hit in recent years as steel mills try to cut costs and prop up profit margins weighed down by the nation’s slowing economy, industry sources said.
China’s steel futures also rebounded from recent losses, with the Shanghai Futures Exchange’s most-traded construction steel rebar contract closing 0.6 per cent higher after data showed the nation’s exports and imports in December rose more than expected.
Hot-rolled steel coil, used in cars and home appliances, advanced 0.5 per cent.
Dalian coking coal was steady but Dalian coke edged up 0.1 per cent.
Shanghai stainless steel futures was down 0.7 per cent.