Iron ore futures in China recovered all losses from the previous session to close higher on Wednesday, fuelled by hopes that demand from steelmakers will increase in the coming months.
The most-traded iron ore futures on the Dalian Commodity Exchange, for September contract, ended 1.2% higher at 613 yuan ($86.56) per tonne, having gained as much as 1.3%.
Steel futures on the Shanghai Futures Exchange also gained, with construction rebar, for October delivery, rising 1.5% to 3,375 yuan a tonne. Hot-rolled coil jumped 0.9% to 3,211 yuan per tonne.
While the China Iron and Steel Association expects domestic steel demand to recover gradually, it has also warned of a pressure on exports of steel products this quarter as the coronavirus spreads to key markets.
Spot prices of iron ore with 62% iron content for delivery to China fell by $2 to $85 per tonne on Tuesday.
Dalian coking coal edged up 0.3% to 1,117 yuan per tonne and Dalian coke gained 1.3% to 1,695 yuan per tonne.
Stainless steel futures, for June delivery, declined 1.8% to 12,950 yuan a tonne.
More than 2.54 million people have been reported to be infected by the novel coronavirus globally and 177,004 have died, according to a Reuters tally.
Japanese steelmakers may need to accelerate restructuring plans or close more facilities as construction project delays due to the coronavirus add to industry woes, according to an analyst and industry officials.
The coronavirus crisis could lead to massive stockpiling of steel that could then flood the European Union when demand returns, the EU trade chief said on Tuesday, adding this was something the bloc would seek to guard against.
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