The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade up 1.26% at 806 yuan ($110.90) a metric ton after hitting its highest level since Oct 14 at 810.5 yuan a ton earlier in the session.
The benchmark January iron ore contract on the Singapore Exchange added 0.1% at $104.5 a ton, as of 0719 GMT. China’s factory activity expanded at the fastest pace in five months in November as new orders, including those from abroad, led to a solid rise in production, a private-sector survey showed, echoing an official survey on Saturday. But demand for the key steelmaking ingredient showed signs of softening as colder weather disrupted construction activities in northern China, limiting upside room, said analysts.
The average daily hot metal output among steelmakers surveyed slid for a second consecutive week by 0.8% from the week before to 2.34 million tons in the week, as of Nov. 29, data from consultancy Mysteel showed.
“Hot metal output is likely to eye further decline in December, but daily output will likely hover above 2.3 million tons,” analysts at Maike Futures said. The hot metal output is typically used to gauge iron ore demand.
Some steelmakers have completed procuring seaborne cargoes to meet production needs after the week-long Chinese New Year Holiday break, said a steelmaker and a trader, requesting anonymity as they are not authorised to speak to the media. But stockpiling of portside cargoes have not started yet, they added.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke losing 1.2% and 0.61%, respectively. Most steel benchmarks on the Shanghai Futures Exchange firmed. Rebar gained 0.18%, hot-rolled coil advanced 0.8%, wire rod rose 0.97%, while stainless steel eased 0.77%.
