Iron ore edged up after a three-day drop on speculation that steel demand in China may rebound seasonally, aiding demand and prices.
Futures of the steel-making staple hit a high of US$103 (RM435.02) a tonne in early trading, after slumping more than 2% in the final three sessions of last week. That losing run came as Beijing reported steel output fell below 80 million tonnes to post its weakest performance for the month of July since 2017.
“The lowest point of the apparent demand for steel has been reached and there’s hope for a seasonal recovery,” analysts at Yongan Futures Co Ltd said in a note. Crude-steel production is rebounding, despite demand for rebar — the steel product used in construction — falling more than expected, they added.
Iron ore futures have largely held above US$100 a tonne for the past month, after finding support from speculation that Beijing will rein in industrial overcapacity. While such a move may crimp iron ore usage, it could improve steel prices and the industry’s profitability, helping to buttress input prices.
Iron ore rose as much as 1.1% before trading little changed at US$102.05 a tonne at 10.49am local time (same time Malaysia), while yuan-priced futures in Dalian were steady. Steel futures in Shanghai declined.
Source:The Edge