BEIJING: Iron ore futures prices rose on Monday, aided by expectations of another wave of restocking by steelmakers in top consumer China, although high portside stocks and concerns about demand next year capped the gains.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 0.97% higher at 781 yuan ($107.01) a metric ton.

It hit the lowest level since Nov. 19 at 762.5 yuan a ton earlier in the session.

The benchmark January iron ore on the Singapore Exchange was up 0.96% at $101.6 a ton, as of 0326 GMT, after touching the lowest since Nov. 19 at $99.8 earlier.

Expectations of buying by Chinese steelmakers before the upcoming holiday break provided some support to the key steelmaking ingredient, said analysts.

“Although hot metal output has showed signs of softening, profitability among steelmakers has stabilised… steel mills continue to replenish iron ore,” analysts at Maike Futures said in a note.

Iron ore slips as supply worries ease

“We expect mills still need to restock around 10 million tons of iron ore before the Chinese New Year (CNY) holiday break.”

Average daily hot metal output slid for a fifth straight week, data from consultancy Mysteel showed.

Output fell by 1.3% week-on-week to hit the lowest level since early October at 2.29 million tons in the week to Dec. 20, according to the data.

Hot metal output is typically used to gauge iron ore demand.

Chinese steelmakers usually build up stocks ahead of the CNY, which starts from Jan. 28, to meet production needs during and after the holiday break.

Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 0.13% and 1.45%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were higher.

Rebar added 0.52%, hot-rolled coil advanced 0.44%, wire rod ticked up 0.25% and stainless steel jumped 1.17%.