Iron ore prices rose on Wednesday as markets expect robust restocking demand in China when covid-19 restrictions are lifted.
Traders pushed prices higher despite China’s Dalian Commodity Exchange raising trading limits and margin requirements for some of its futures products, including iron ore, ahead of the April 5 Tomb Sweeping Day holiday.
The most-traded Dalian iron ore for September delivery ended daytime trade 3% higher at 895 yuan ($140.90) a tonne, after touching 898 yuan, the highest since August 9.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $158.20 a tonne during morning trading, up 3.4% compared to Tuesday’s closing.
Optimism over prospects of additional policy support to shore up the world’s second-largest economy and biggest steel producer, and signs of a resilient Chinese industrial sector, have provided strong support to iron ore.
“Traders are buying the steelmaking ingredient following data (showing) that Chinese industrial companies enjoyed strong profit growth in Jan-Feb 2022,” SP Angel analyst John Meyer said, referring to data released earlier this week.
