Dalian and Singapore iron ore futures rebounded in afternoon trading on Friday as sentiment improved, helped by data showing that inventories at Chinese ports continued to fall in the past week.
The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) ended daytime trading 0.29% higher at 866.5 yuan ($126.43) a tonne, but marked a week-on-week fall of 4.3% and a month-on-month drop of 4.6%.
Concerns that China may cut crude steel output this year had pressured the market this week along with weaker-than-expected steel demand and prospects of higher ore supply, but sentiment picked up after port inventory data on Friday.
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On the Singapore Exchange, the benchmark April iron ore was 1.42% higher at $119.9 a tonne by 0716 GMT, following a drop of 4.5% so far this week.
“It’s natural to see (the iron ore) price rebound after dramatic falls within this week. We believe the price has nearly hit bottom at this stage,” said a Shanghai-based iron ore analyst.
Iron ore inventories at major Chinese ports fell for the fourth week in a row by a total of 4.3% to 136.05 million tonnes as of March 24, data from consultancy Mysteel showed on Friday.
“Demand for seaborne (iron ore) cargoes to be shipped in April remained relatively firm, which may lend support to the market in the short term,” said Pei Hao, a Shanghai-based senior analyst at international brokerage FIS.
Prices of other steelmaking raw materials such as coking coal and coke similarly ended daytime trading with gains, with the former DJMcv1 climbing 1.47% and the latter rising 0.53%.
Likewise, steel futures prices managed to regain some lost ground, recovering some losses or even making some gains, compared to the morning trading session.
Rebar on the Shanghai Futures Exchange dipped 0.44% to 4,107 yuan a tonne, hot-rolled coil edged down 0.33%. Wire rod rose 1.18% and stainless steel gained 0.56%.
Source: Reuters (Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Sherry Jacob-Phillips and Susan Fenton)
