Iron ore futures extended gains for a second straight session on Tuesday, hitting their highest levels in nearly a week, amid growing interest in inventories in China, the ore’s main consuming market, partly spurred by latest set of optimistic data released.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended the day up 5.35% at 827 yuan ($114.87) a ton, its highest level since March 13.
Benchmark iron ore for April on the Singapore Exchange rose 2.91% to $106.9 a tonne, also the highest since March 13.
“Increased fixed asset investment should help support demand for steel,” analysts at ANZ said in a note.
According to official data released on Monday, investment in fixed assets grew 4.2% in the January-February period compared to the same period a year earlier, compared to expectations of a 3.2% increase.
Additionally, signs of stabilization in futures prices the previous day encouraged some mills to re-enter the market to buy port cargoes, with greater liquidity in the spot market in turn boosting sentiment, analysts said.
According to data from consultancy Mysteel, iron ore transaction volumes at major Chinese ports rose 66% from the previous session to 1.06 million tonnes.
“We expect hot metal production to hit lows this week,” analysts at Galaxy Futures said in a note.
“Demand for steel from the infrastructure sector will likely see a noticeable increase in late March or early April, so we don’t think we should be too pessimistic about the construction steel market,” they added.
Source: Terra
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