The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 1.21% higher at 795 yuan ($114.16) a metric ton.
The contract lost 2.82% this week. The benchmark February iron ore on the Singapore Exchange was 0.97% higher at $104.65 a ton as of 0700 GMT.
The contract declined 1.59% week-on-week.
The continuous decline in iron ore prices helped alleviate market pessimism, allowing steel mills to procure more ore and maintain profit margins ahead of the Chinese Lunar New Year, according to a note from the Shanghai Metals Market on January 22.
Steel profit margins are still acceptable due to consistently low prices of steelmaking ingredients, coking coal and coke, a trader familiar with the matter told Reuters. Hence, hot metal output is still expected to increase, and steel mill inventory still has room to grow, he added.
Several short-process steel mills in Guangxi and Guangdong plan to suspend production by late January before the Chinese Lunar New Year holidays, with production set to resume in March, according to a note from Mysteel.
