MANILA: Dalian and Singapore iron ore futures rose on Tuesday, as spot prices of the steelmaking ingredient held firm near 10-month highs on robust demand from China's steel mills and concerns over supply.
Iron ore on China's Dalian Commodity Exchange ended the session up 1.0% at 781 yuan ($110.37) a tonne, while the Singapore Exchange's benchmark contract gained 2.3% to $102.79 in afternoon trade.
Weekly production of construction material rebar by some 137 Chinese steelmakers reached 3.99 million tonnes over June 4-10, according to a Mysteel survey, the highest weekly level since the survey began in 2015.
China's crude steel output jumped 8.5% from a month earlier to a record 92.4 million tonnes in May amid a construction boom fuelled by an infrastructure-led
recovery programme for the coronavirus-hit domestic economy.
Steel mills' strong appetite for iron ore further reduced portside stockpiles of the material, which dropped to 107.75 million tonnes last week, the lowest since October 2016, SteelHome consultancy data showed.
"As this recovery momentum will continue to be sustaine we expect China's commodity demand will see further improvement," said Helen Lau, an analyst at Argonaut Securities.
But some analysts warned of near-term headwinds for the market, such as the onset of the rainy season in southern China, which will likely slow construction activity, and a potential rise in coronavirus infections, which could slow economic recovery.
Rebar on the Shanghai Futures Exchange slipped 0.1%, while hot-rolled coil gained 0.1% and stainless steel rose 0.3%.
Coking coal gained 0.9% but coke lost 0.2%.
Benchmark spot 62% iron ore was steady at $105 a tonne on Monday, SteelHome consultancy data showed.
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