BEIJING (Reuters) - China’s iron ore futures closed up on Tuesday, shored up by expectations of higher demand after top steelmaking city Tangshan lifted its second-level smog alert.
The most-active iron ore futures on the Dalian Commodity Exchange, for May 2020 delivery, closed up 0.3% at 667 yuan ($96.05) per ton.
Tangshan, which issued an orange alert last week for pollution due to deteriorating weather conditions, said on Monday it will lift its heavy pollution controls as the air quality was expected to improve.
Orange alerts, the second-highest after red in Hebei’s three-tier pollution warning system, require companies to take action to cut emissions and in some cases restrict output, although the province has a “positive list” exempting thousands of firms from production cuts.
“Domestic steel mills’ restocking supports demand for iron ore,” Huatai Futures wrote in a note, adding that iron ore prices are anticipated to be relatively strong in the short term.
Supply of the steelmaking ingredient, however, has been affected by lean shipments from Australia and Brazil recently, Huatai Futures added.
The world’s two biggest suppliers sent out a combined 20.086 million tonnes of iron ore last week, down 367,000 tonnes from a week earlier, data from Mysteel consultancy showed.
Prices for spot cargoes of iron ore with 62% iron content for delivery to China rose for the third consecutive session to $95 a ton on Monday. [SH-CCN-IRNOR62]
The most-traded May contract of benchmark steel rebar on the Shanghai Futures Exchange rose 0.7% to 3,574 yuan per ton, the highest closing price since July 17.
Hot-rolled coil, used in cars and home appliances, gained 0.5% to 3,588 yuan per ton.
* Other steelmaking raw materials advanced, with Dalian coking coal jumping 1.2% to 1,192 yuan per ton and Dalian coke rising 1% to 1,891 yuan per ton, respectively.
* The front-month February contract for Shanghai stainless steel futures climbed 0.7% to 14,110 yuan per ton.
* China Minmetals Corp said on Monday its 2019 net profit rose 28.9% on-year and iron resources stood at 4.1 billion tonnes.
Reporting by Min Zhang and Shivani Singh, Editing by Sherry Jacob-Phillips and Uttaresh.V