Iron ore climbs as Hebei mills resume output; auto weakness caps upside

Iron ore demand is expected to firm next week as ⁠output recovers.

“>

Iron ore futures climbed on Thursday, buoyed by hopes of higher hot metal output as mills in China’s steelmaking hub of Hebei completed regulatory checks, though weaker auto sales and a softer outlook for car exports may cap price gains.

The most-traded ‌May iron ⁠ore contract ⁠on China’s Dalian Commodity Exchange (DCE) traded 1.34 per cent higher at 795.5 yuan ($115.68) a metric ton.

The benchmark April iron ore on the Singapore Exchange rose 1.01 per cent to $105.2 a ton as of 0707 GMT.

Hot metal output declined this week as several steel mills in Hebei – the province surrounding Beijing – underwent safety and environmental inspections during key government meetings in the ⁠capital, according ‌to a note from Shanghai Metals Market.

Iron ore demand is expected to firm next week as ⁠output recovers.

Construction companies are expected to buy 5.64 million tons of steel in March, a 17 per cent month-on-month jump, consultancy Mysteel said.

Steel demand typically rises in March as construction resumesin warmer weather and mills ramp up production after Lunar New Year maintenance.

Production of scrap steel, which is usually melted in electric-arc furnaces and further processed to make steel, is also expected to rebound ‌in March after a February dip, Mysteel added.

Meanwhile, China’s wholesale auto sales tumbled 15 per cent in February, and the Iran war has dampened the outlook ⁠for car exports.

China’s automobile sector has become a significant consumer of steel in recent years, offsetting some weakness from the country’s struggling property market. Other steelmaking ingredients on the DCE jumped, with coking coal and coke rising 2.13 per cent and 1.56 per cent, respectively.

Steel benchmarks on the Shanghai Futures Exchange mostly advanced. Rebar gained 0.42 per cent, hot-rolled coil climbed 0.37 per cent, and stainless steel hardened 0.88 per cent. Meanwhile, wire rod shed 0.21 per cent.

Join the community of 2M+ industry professionals.

Subscribe to Newsletter to get latest insights & analysis in your inbox.

All about ETAuto industry right on your smartphone!

• Download the ETAuto App and get the Realtime updates and Save your favourite articles.