Iron Ore Pushes Higher on Steel Demand as Global Supply in Focus
(Bloomberg) -- Iron ore futures in Singapore surged on signs of robust demand from China’s steel sector, while the market’s focus shifts to output reports from the top producers this week.
Prices advanced for a fourth day on buoyant consumption and improved mill profitability in China, the world’s top steel market. Crude steel production jumped 19% last month from a year earlier to near a record, while exports climbed in March amid optimism about the global economic recovery.
China’s steel output is booming at the same time a pollution crackdown has lifted prices of the alloy and benefited profit margins at the nation’s mills.
The country’s crude steel capacity is still expected to increase this year despite the environmental restrictions in some provinces, Vivek Dhar, an analyst at Commonwealth Bank of Australia, wrote in a note. The risk to China’s production has decreased as mill margins have risen on optimism about demand after the Chinese New Year period, he wrote.
On the supply side Vale SA, Rio Tinto Group and BHP Group are due to report production data this week as well as give market outlooks.
Iron ore futures in Singapore climbed as much as 1.7% to $175.20 a ton before trading at $174.60 by 3:12 p.m. local time. Prices in Dalian closed 1.3% higher, while hot-rolled coil and rebar declined in Shanghai.
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