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China’s iron ore hits record high on brisk demand, stimulus hopes - Trader

Mining News - Published on Fri, 17 May 2019

Image Source: SteelGuru
Reuters reported that China’s benchmark iron ore futures jumped to a record high on Thursday, rising along with the rest of the country’s ferrous complex on robust demand for the steelmaking feedstock amid falling stocks. Expectations that steel demand in the world’s top consumer will also remain strong buoyed prices of construction-used rebar and hot-rolled coil. Surprisingly weaker growth in Chinese retail sales and industrial output for April added to pressure on Beijing to roll out more stimulus measures, sparking hopes of more investments in infrastructure that could further boost steel demand. The most-traded September 2019 iron ore on the Dalian Commodity Exchange surged as much as 5.5% to CNY 685 a tonne, the contract’s highest since 2013, before closing 4.8% higher at CNY 680.5.

A Shanghai-based trader said that “It’s because of some seasonal demand, which is quite strong, with some impact from the supply side.” Steel mills were replenishing their iron ore stocks as healthy profit margins encouraged them to boost output, the trader said.

The trader said that “Profit margin is still good because we (also) have some restrictions on the production side for environmental protection. This situation will last maybe until autumn, or the third quarter of this year.”

China’s crude steel production rose 12.7% in April from March to its highest monthly level on record, official data showed on Wednesday, bolstered by firm demand and good profitability.

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Posted By : Rabi Wangkhem on Fri, 17 May 2019
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