Iron ore futures inched up at the closing of the afternoon session over supply tightness of mid-grade ores among portside stocks.
Thus, the most-traded iron ore for September delivery on China’s Dalian Commodity Exchange rose by 2.31% or RMB 19 day-on-day to RMB 841.50 per tonne on Wednesday.
Then, the steel rebar contract on the Shanghai Futures Exchange also booked a slight gain of 0.67% or RMB 25 to RMB 3,766 per tonne.
Australian ports maintenance to last till early August
The supply tightness was linked to berth maintenance for Port Hedland and Port Walcott that lasted till early August at Western Australia, affecting some shipments of mid-grade ores in the process.
Due to supply tightness of mid-grade ores, some end-users suggested using high grade materials for blending with low grade materials to save costs, instead of using mid-grade ores.
However, the mid-grade ores remained popular among mills, thus not many are willing to change their blends amid decent steel margins.
High iron ore prices boost Rio Tinto’s H1 earnings
Rio Tinto reported H1 2020 earning at $4.75 billion, down 3.65% on-year from $4.93 billion last year, but beat market estimated earnings of $4.36 billion.
The high prices of iron ore played a big role at the underlying earnings that accounted around 80% of the total earning with gain of 1% on-year to $4.56 billion in the half-year, and shipments of Pilbara iron ores rose by 3% on yearly basis.
So far, the robust China’s steel demand had resulted the uptick of iron ore prices that went above $100 per tonne over the Jun-Jul period, as the country’s loose monetary and fiscal stimulus policies supported infrastructure projects.