The iron ore price rose on Friday
as traders returned from the New Year holidays feeling optimistic about
potential demand recovery in China.
According to Fastmarkets MB,
benchmark 62% Fe fines imported into Northern China were changing hands for
$128.03 a tonne during morning trading, up 0.3% compared to Thursday’s closing,
the highest since October 12.
Iron ore’s most-active May
contract on China’s Dalian Commodity Exchange ended daytime trading 1.4% higher
at 719 yuan ($112.78) a tonne, rising for a fourth straight session and
touching 725.50 yuan earlier in the day.
“The current rise in raw
materials and the limited production during the Winter Olympics have boosted
steel prices to a certain extent, but the demand side is still weak,” Sinosteel
Futures analysts said in a note.
China is expected to curb mills’
operations in its steel production hubs to ensure clean air during the Beijing
2022 Olympics next month.
But analysts said hopes for an
easing of steel production controls after the Games have helped underpin iron
ore, along with some restocking demand ahead of the Chinese Spring Festival
holidays starting January 31.
“After the Winter Olympics, there
is an opportunity to relax the production limit (for steel),” analysts at
Zhongzhou Futures said in a note.