Iron ore futures ended lower on Friday, but the benchmark Dalian contract posted its biggest weekly gain in three months on hopes of robust demand for the steelmaking raw material as China's steel inventories shrank.
Iron ore on China's Dalian Commodity Exchange closed 0.8% down at 832.50 yuan ($125.67) a tonne. It gained 5.3% for the week, its steepest weekly rise since early August. The Singapore Exchange benchmark slipped 0.8% to $118.94 a tonne by 0729 GMT, after scaling a contract-high of $121.78 on Thursday. It has climbed 4.2% this week.
Firm steel demand from end-users and mills' lower output boosted prices this week, with spot iron ore touching a four-week high of $124.50 a tonne on Thursday, according to SteelHome consultancy. Stocks of the five major finished steel products in China, the world's top producer and consumer of ferrous metals, fell this week to a 10-month low of 5.2 million tonnes, according to Mysteel consultancy's survey of 184 mills.
"This week, the (steel) destocking speed exceeded 1 million tonnes," accelerating from October levels, Sinosteel Futures analysts said in a note. However, looming restrictions on China's property sector could dampen the market's enthusiasm over iron ore demand prospects.
