Benchmark iron ore futures on China's Dalian Commodity Exchange closed firmer on Tuesday, snapping two straight sessions of declines, as prices were propped up by falling portside inventories and upbeat demand at downstream sectors.
The most-actively traded contract of the steelmaking ingredient, for January delivery, closed up 2.3% at 834 yuan ($119.89) per tonne. It jumped as much as 4.5% to 852 yuan in early session.
"Concerns over iron ore shipments and structural contradiction of fines inventories are the main factors to drive the price," Huatai Futures wrote in a note.
China's portside iron ore stockpiles fell for a second straight week to 116.15 million tonnes by Aug. 7, data compiled by SteelHome consultancy showed.
Huatai Futures said market demand for steel products are gradually recovering, and forecasts hot-rolled coils to outperform rebar in the third quarter, but expects the latter to take turns to outperform hot-rolled coils in the following quarter.
The most traded rebar futures on the Shanghai Futures Exchange, for October delivery, closed down 0.7% to 3,795 yuan per tonne.
Hot-rolled coils, used in cars and home appliances, dipped 0.5% to 3,872 yuan a tonne.
Spot prices for iron ore with 62% iron content for delivery to China dipped by $1 to $117.5 a tonne on Monday from the previous session.
