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Iron ore futures surge to 5-month high on Friday; steel futures down China
Times:[ 2020-01-07 Author:admin Hit:
Iron ore futures rose for a fifth straight session on Friday, with the benchmark Chinese index hitting its highest in five months, after data showed Brazil's exports of the steelmaking raw material shrank in December.

Iron ore restocking ahead of the Lunar New Year holidays this month in China, which produces half of the world's steel supply, also continued to support spot and futures prices.

The Dalian Commodity Exchange's most-traded iron ore contract, with May expiry, ended 1.6pct higher at 666 yuan (USD 95.53) a ton, after hitting 670.50 yuan earlier in the session, its highest since Aug. 6, 2019.

On the Singapore Exchange, the front-month February contract was up 0.5pct at USD 92.30 a ton in afternoon trade.

Iron ore exports by Brazil, home to the world's top producer Vale SA, dropped to 24.67 mln tons in December from 27.25 mln tons the month before and 33.20 mln tons a year earlier, official data showed.

Iron ore's availability remains a key concern for the market after the commodity rallied last year to a five-year high, driven mainly by supply disruptions.

Last month, Vale flagged reduced output in the first quarter of 2020 as safety checks involving its mining facilities continued following a tailings dam disaster in January last year.

The light trading volumes, however, suggest that the price gains were mainly sentiment-driven, a Shanghai-based trader said.

"We don't see very strong demand for iron ore these days, but there's good news that lifted market sentiment," the trader said, referring to the latest monetary policy-easing move by China's central bank.

Prices for spot cargoes of benchmark iron ore with 62pct iron content for delivery to China gained 50 cents to settle at USD 93.50 a ton on Thursday, the highest in two weeks.

The most-traded steel rebar contract on the Shanghai Futures Exchange was down 0.6pct, extending losses amid tepid demand for the construction material and rising inventory in China over winter.

Hot-rolled steel coil slipped 0.8pct.

Shanghai stainless steel futures slumped 2.3pct, closing at their lowest since Dec. 6, 2019.

Dalian coking coal was up 0.5pct, but Dalian coke declined 0.6pct.