Iron ore futures continued to rise on better market sentiment on recovering steel demand and Chinese economic activities.
The futures of Dalian Commodity Exchange (DCE) for May delivery then rose by 4.64% day-on-day or up RMB 33.50 to RMB 755/mt, during the day trading session on Wednesday.
The rebar futures also rose by 1.76% or RMB 84 day-on-day to RMB 4,860/mt, during the day trading session.
Recovering output and expectation of stimulus packages
Market sentiments were positive as the Chinese market will enter its traditional peak steel demand construction season in March.
Though, there were doubts about the steel consumption of the debt-ridden Chinese property sector, but the manufacturing sector continued to grow in evident of good PMIs ratings recorded last month that indicated a rebound from previous slump.
Moreover, China’s Two Session political meeting commenced this week, and market is expected to receive some form of direction provided by the Beijing policymaker to stimulate the economy and trade.
High grade fines in demand amid Russia-Ukraine conflict
The price of high-grade fines like Carajas fines got a boost from the recent Russia-Ukraine conflict, which limited the supply of Ukrainian concentrates and pellets in the market.
According to Platts assessment, the benchmark prices of 65% ferrous content had hiked above the $170/mt level this week, after a slump in mid-February, following Chinese authority’s crackdown on false price information fabrication.
However, most Chinese buyers were mostly focused on procurement of portside inventories, due to the domestic materials’ competitive pricings against seaborne cargoes that incurred higher import losses.