SINGAPORE: Iron ore futures strengthened on Monday as brightening demand for the key steelmaking ingredient in top consumer China outweighed US tariff concerns.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) climbed 1.97% to 776 yuan ($106.90) a metric ton as of 0255 GMT. The benchmark April iron ore on the Singapore Exchange advanced 1.49% to $101.4 a ton.
“Production among China’s independent electric-arc-furnace (EAF) steel producers increased further this week in response to the continuous recovery of domestic steel demand,” said consultancy Mysteel.
The average capacity utilisation rate for EAF mills rose for the sixth straight week on Friday to 54.9%, its highest since June 2024, data from Mysteel showed.
Hot metal production, typically used to gauge iron ore demand, increased significantly month-on-month, while manufacturing steel demand remained high, broker Galaxy Futures said.
Portside iron ore inventories eased about 0.1% to 138.5 million tons as of March 21, per weekly data tracked by SteelHome.
Meanwhile, Chinese Premier Li Qiang, at a business forum in Beijing on Sunday, urged countries to open their markets to combat “rising instability and uncertainty”, as China braces for further US tariffs.
Beijing is mulling setting up related funds to build a compensation system to eliminate outdated steel capacity, Qian Gang, chairman of CITIC Pacific Special Steel, was quoted as saying on Friday.
At its annual parliamentary meeting earlier this month, China said it would restructure its giant steel industry through output cuts, but did not announce any targets.
Other steelmaking ingredients on the DCE gained, with coking coal adding 0.69% and coke rising 1.81%.
Most steel benchmarks on the Shanghai Futures Exchange rose.
Rebar advanced 1.07%, hot-rolled coil added 1.4%, wire rod gained nearly 0.8%, while stainless steel fell 0.22%.
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