MANILA: Dalian iron ore futures closed higher on Friday, marking their fifth straight monthly gain, as accelerating factory activity in China further boosted sentiment that was already upbeat on hopes of more government support for its economy.
The Dalian Commodity Exchange's most-traded iron ore contract ended 1.3% higher at 849.50 yuan ($121.53) a tonne, helping it post a fourth consecutive weekly gain. The commodity shrugged off expectations for weak steel demand in July, receding supply risks and rising Chinese port stockpiles, with spot prices staying above $100 a tonne near a 12-month high.
Steel futures' monthly winning streaks also remained unbroken, reflecting optimism about further stimulus measures to sustain China's post-lockdown economic recovery that is driving steel mills to produce more.
"At present, steel mills are still profitable and companies have no incentive to reduce production," analysts at Sinosteel Futures Co Ltd wrote in a note. "The market's demand expectation has further strengthened."
Factory activity in the world's top metals consumer expanded at a faster rate in July, beating analyst expectations despite disruptions from floods and resurgence in global coronavirus cases.
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