The iron ore price rose on Tuesday on growing hopes of a recovery for steel demand in China.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $129.17 a tonne during morning trading, up 3.2% compared to Monday’s closing.
Benchmark iron ore futures on the Dalian Commodity Exchange ended up 2.8% to 724 yuan per tonne.
“Domestic stainless steel firms are stepping up maintenance in the first quarter, while affected by the Spring Festival holidays and Beijing Winter Olympics; overall production is expected to be limited,” analysts with Jinrui Futures wrote in a note.
The most-actively traded stainless steel contract on the Shanghai Futures Exchange, for February delivery, jumped as much as 5.3% to 17,920 yuan ($2,812.39) per tonne, closing up 4.4% at 17,760 yuan a tonne.
The China Iron and Steel Association said on Monday China’s 2021 crude steel output was expected to fall to 1.03 billion tonnes from a record of 1.065 billion tonnes, reaching a “supply and demand balance.”
“There’s still room for profits at long-process steel producers to gain, and expectation on resuming steel production and restocking demand before holidays could shore up iron ore prices,” said analysts at Huatai Futures.