Steel mill. Stock Image.
Iron ore price hit an eight-month high on Friday, driven by optimism about future steel demand in China.
Benchmark 62% Fe fines imported into Northern China rose 0.54%, to $127.70 per tonne.
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The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) ended daytime trade 1.04% higher at 919 yuan ($133.15) a tonne, a peak since July 2022.
“Mills are ramping up production but their iron ore inventories are relatively low, supporting iron ore prices,” a Shanghai-based iron ore trader told Reuters.
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The blast furnace operational rate of 247 surveyed steel mills across China stood at 81.07% as of March 3, recording a year-on-year rise of 6.35%, data from consultancy Mysteel showed.
Portside iron ore inventories, however, fell by 2.23 million tonnes week-on-week to approximately 140 million tonnes, the data showed.
“We believe the better-than-expected data has injected some confidence into the market. Also, the expectation of continued improvement in downstream (steel) demand lent support to the prices of raw materials including iron ore,” said Yu Chen, a Shanghai-based senior iron ore analyst at consultancy Mysteel.
(With files from Reuters)