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UPDATE 1-Dalian iron ore rises for third day on lower Australia shipments

Published 29/10/2020, 06:21 pm
© Reuters.
FMG
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* Australia's iron ore shipments to China hit four-week low

* Brazil's iron ore shipments rise but below weekly average

* China port congestion still a concern, CRU analyst says

* Japan, S.Korea steelmaking activity picking up -Fortescue (Updates prices, adds graphic)

By Enrico Dela Cruz

MANILA, Oct 29 (Reuters) - China's iron ore futures rose for a third straight session on Thursday, supported by industry data showing a decline in weekly shipments of the steelmaking ingredient from Australia.

Iron ore on China's Dalian Commodity Exchange DCIOcv1 closed the daytime trading up 0.7% at 779.50 yuan ($116.18) a tonne.

It slipped 0.3% to $114.30 a tonne by 0704 GMT on the Singapore Exchange SZZFX0 , but was on course for a weekly gain.

Shipments from Australia ORE-AUCN-TOT last week fell to 14 million tonnes, the lowest since the third week of September, Refinitiv Eikon data showed.

While shipments from Brazil ORE-BRCN-TOT to China rose to 3.97 million tonnes, from 3.79 million tonnes in the prior week, they were below the weekly average of around 5.1 million tonnes between September and October.

Iron ore was also supported by lingering concerns over congestion at Chinese ports, and as investors waited for China's economic blueprint to be laid out at this week's Communist Party plenum.

"The ports are simply unable to keep up with the high arrivals and the vessel queue has been building up since the start of Q3," said Erik Hedborg, senior analyst for iron ore at CRU in London.

Iron ore port stocks in China have piled up to more than 120 million tonnes, but Hedborg said the volume would have been at least 15 million tonnes higher if unloading was quick.

"Plus there is certainly a risk premium in the market at the moment," he said, citing factors including the La Nina weather phenomenon that could hamper supply.

FUNDAMENTALS

* Iron ore miner Fortescue Metals FMG.AX said steelmaking activity has started picking up across Japan and South Korea. Rebar on the Shanghai Futures Exchange SRBcv1 rose 0.7%, while hot-rolled coil SHHCcv1 gained 0.3%. Stainless steel SHSScv1 fell 1%.

* Coking coal DJMcv1 climbed 1.4% while coke DCJcv1 added 0.1%.

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https://tmsnrt.rs/31UHXSF

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