Dalian iron ore futures leap on restocking demand at steel mills
BEIJING, Nov 30 (Reuters) - Benchmark Chinese iron ore futures jumped over 6% on Tuesday, fuelled by recent restocking demand at steel firms, although analysts expect weak property and infrastructure investment to slow the long-term consumption of the steelmaking ingredient.
The most-traded iron ore contract on the Dalian Commodity Exchange , for January delivery, ended 2.4% higher at 610 yuan ($95.75) a tonne , after rising as much as 6.4% to 633 yuan in early trade.
"Driven by high profits at mills... iron ore prices will rebound to some extent," analysts with Huatai Futures wrote in a note, adding demand was hard to be sustained in the long run on cooling steel consumption.
Spot prices of iron ore with 62% iron content for delivery to China rose $3 to $105 a tonne on Monday, according to SteelHome consultancy.
"With iron ore inventory in China at a record high and as steel production keeps declining, we think the downward pressure on iron ore prices will persist," CreditSights said in a report.
Other steelmaking raw materials also gained on Tuesday. Dalian coking coal futures , for May delivery, soared 6% to 1,887 yuan a tonne at close. Coke prices gained 2.4% to 2,663 yuan per tonne.
Steel prices on the Shanghai Futures Exchange were range-bound.
The May contract for construction rebar inched up 0.9% to 4,163 yuan a tonne.
Hot rolled coils , used in the manufacturing sector and for January delivery, edged 0.7% higher to 4,588 yuan per tonne.
"China's steel demand, which has been dragged down by weak property and infrastructure investment in the past few months, is now bottoming out," CreditSights said in its report.
Stainless steel futures on the Shanghai bourse fell 1.7% to 16,905 yuan a tonne.
($1 = 6.3705 Chinese yuan renminbi)
Our Standards: The Thomson Reuters Trust Principles.