BEIJING: Dalian and Singapore iron ore futures climbed to one-week highs on Tuesday, as China’s better-than expected economic growth in the March quarter boosted investor sentiment.
China’s gross domestic product grew 4.5% year-on-year in the first three months of the year, data from the National Bureau of Statistics showed, faster than the previous quarter’s 2.9% growth and beating analyst forecasts for a 4.0% expansion.
The most-traded September iron ore on the Dalian Commodity Exchange (DCE) was up 2.08% at a one-week high of 784 yuan ($114.04) a tonne, as of 0320 GMT.
On the Singapore Exchange, the benchmark May iron ore was up 0.88% at $117.8 a tonne, as of 0326 GMT, the highest since April 12. “Solid demand provided certain support to iron ore prices, but there are downside risks stemming from thin steel margins. Also, daily hot metal output may fall after having hit a peak in March,” analysts at Sinosteel Futures said in a morning note. Weather, which affects the pace of shipments, will not have a much effect on the overall supply, they added.
Iron ore prices gained some ground last week on worries about possible supply disruptions from Australia due to a tropical cyclone. However, the cyclone spared the world’s largest iron ore export hub at Port Hedland.
The steelmaking ingredient had been facing downward pressure since late March, partly due to weaker-than-expected steel demand during China’s peak construction activity season. Other steelmaking ingredients including coking coal and coke also recorded gains on Tuesday. Coking coal rose 2.26% and coke gained 1.69%. Rebar on the Shanghai Futures Exchange climbed 1% to 3,946 yuan a tonne, hot-rolled coil moved up 0.93%, and wire rod advanced 0.64%.
Around 78% of the surveyed electric arc furnace-based steelmakers in South China’s Guangzhou province reduced their production as of April 17 due to losses, consultancy Mysteel said in a report. Stainless steel nudged down 0.06%.
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