China Steelmaking Raw Material Futures Rally, Iron Ore Up For 6th Day
31 October 2016
Dalian iron ore prices extended their winning streak to a sixth session on Monday and coke futures hit a more than three-year high, as tight supplies and firm demand in top consumer China underpinned prices of the steelmaking raw materials.
However, the sharp spike in prices of the commodities, that last week rose by the most in six months, spurred caution among Chinese mills amid relatively smaller gains in steel futures.
"Raw materials sustained the rally, lifting mills' production costs. Rebar producers are not enjoying any profit now, but demand for steel flat products remained strong, which may last until November," said Xia Junyan, investment manager at Hangzhou CIEC Trading Co in Shanghai.
Xia added that mills are currently making a profit of about 300 yuan ($44.32) a tonne. That is steady versus September but down about 70 percent from this year's peaks in April.
The most-traded iron ore on the Dalian Commodity Exchange jumped 2.1 percent to 496 yuan by the midday break, after touching a high of 499.5 yuan a tonne earlier in the session, the loftiest since August 2014.
Coking coal rose 2.8 percent to 1,298.5 yuan, while benchmark coke futures surged 4.4 percent to 1,782.5 yuan, the highest since August.
Source : reuters.com