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UPDATE 1-Dalian iron ore edges higher on China demand hopes; SGX prices retreat

Published 12/10/2020, 06:30 pm
Updated 12/10/2020, 06:36 pm
© Reuters.

* Dalian iron ore ends up 0.4%, SGX iron ore down 1.1%

* China iron ore port stockpile at 7-month high - SteelHome

* Looming La Nina may disrupt iron ore supply - ANZ analysts (Updates prices, adds chart)

By Enrico Dela Cruz

MANILA, Oct 12 (Reuters) - Chinese iron ore futures edged higher on Monday on hopes that demand for the steelmaking ingredient will remain robust in the world's top steel producer, although easing supply concerns capped gains in Dalian while pulling down prices in Singapore.

Iron ore on China's Dalian Commodity Exchange DCIOcv1 closed 0.4% higher at 825 yuan ($122.90) a tonne. It jumped 3.8% on Friday, when Chinese traders returned to work after the Oct. 1-8 holiday.

On the Singapore Exchange, iron ore SZZFX0 slipped 1.1% to $119.80 a tonne by 0708 GMT after rising for the previous two sessions.

Post-holiday demand lifted spot prices in China to $125 a tonne on Friday, the highest since Sept. 15, according to SteelHome consultancy data. SH-CCN-IRNOR62

Support for iron ore was intact ahead of the China Communist Party's plenary session later this month, where policies related to infrastructure and real estate are likely to be discussed, commodity strategists at ANZ said. such support may wane amid rising iron ore port stockpiles in China, strategists said the risk of supply disruption could emerge from a looming La Nina that normally brings heavy rains in top iron ore and coking coal producer Australia. China's demand being boosted by fiscal stimulus measures in infrastructure, any bigger than normal disruption would likely see a spike in iron ore prices," they said in a note.

In the meantime, iron ore shipments from Australia and Brazil continue and have even increased in recent weeks, causing China's port inventory to pile up to 123.6 million tonnes, the highest since March 20, SteelHome data showed. SH-TOT-IRONINV

Steel futures also rose, with construction material rebar on the Shanghai Futures Exchange SRBcv1 up 0.7%, while hot-rolled coil SHHCcv1 rose 1.4% and stainless steel SHSScv1 gained 0.7%.

Other steelmaking ingredients also extended gains, with Dalian coking coal DJMcv1 climbing 2.4% while coke DCJcv1 advanced 1.2%.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ China post-holiday iron ore and steel inventories

https://tmsnrt.rs/36YUTdw

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