MANILA: Iron ore futures in top steel producer China jumped on Wednesday to their highest since mid-October, underpinned by concerns over supply as traders digested reports of lower import arrivals and shipments departing Australia and Brazil.
The most-traded May contract for the steelmaking ingredient on China’s Dalian Commodity Exchange rose as much as 3.2% to 774.50 yuan ($122.49) a tonne.
On the Singapore Exchange, however, iron ore’s most-active March contract slipped 0.8% to $136.20 a tonne by 0358 GMT in volatile trade.
Both Dalian and Singapore iron ore benchmarks were on track for weekly gains after major miners Fortescue Metals Group, BHP Group and Rio Tinto warned of disruptions from labour shortages as Australia faces a surge of Omicron coronavirus variant cases.
Supply worries have boosted iron ore prices, which have rebounded this month as China’s stepped up monetary easing efforts to shore up its slowing economy.
The spot price of benchmark 62%-grade iron ore for delivery to China jumped to $138 a tonne on Tuesday, the strongest since Sept. 7, according to SteelHome consultancy price assessment.
“The first quarter is the off-season for overseas mine shipments,” Zhongzhou Futures analysts said in a note on the company’s website. “It is necessary to pay attention to the impact of... weather, epidemics, etc. on mine shipments.”
They said a La Nina weather phenomenon has developed in the Pacific Ocean for the second year in a row and it could mean greater rainfall and more tropical cyclones in Australia, where the cyclone season usually runs from November to April.
Australia accounts for about 60% of iron ore shipments to China, while Brazil is the second-biggest supplier with a share of about 20%.
Construction steel rebar and hot-rolled coil on the Shanghai Futures Exchange both slipped 0.3%, while stainless steel dropped 0.6%.
Dalian coking coal advanced 0.5% and coke gained 1.4%.
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