admin Iron ore futures in China rose to a 19th Months high in August, fueled by hopes of stable demand as anti-pollution curbs in top steelmaking cities ahead of the National Day holiday were more lenient than expected. The most-traded iron ore futures contract on the Dalian Commodity Exchange for January 2020 delivery rose as much as 2.1% to 649 yuan ($91.50) a tonne on Wednesday and closed at 644.5 yuan.
“Overall production curbs in Tangshan in September are on par with August, which are loose,” Huatai Futures said in a note, adding that output restrictions in Wuan, county-level city of the second-biggest steelmaking city of Handan, tightened slightly this month compared with August. The most-active construction steel rebar on the Shanghai Futures Exchange was closed up 0.7% at 3,423 yuan a tonne.
“We believe that Chinese demand has further room to grow and outpace production in Q419 and 2020 as the government is now more likely to step up targeted stimulus for the infrastructure sector on the back of a more protracted trade dispute with the US,” according to Fitch Solutions Macro Research. Benchmark 62% iron ore for delivery to China, as assessed by SteelHome consultancy, settled at $91 a tonne on Tuesday.
Hot-rolled coil, used in cars and home appliances, on the Shanghai Futures Exchange rose 0.5% to 3,465 yuan per tonne. Other steelmaking ingredients were also up, with Dalian coking coal adding 0.7% to 1,319 yuan a tonne, while coke gained 1.2% to 1,916 yuan. Activity in China’s services sector expanded at the fastest pace in three months in August as new orders rose, prompting the biggest increase in hiring in over a year, a private survey showed.
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