China’s Iron Ore Futures Are Exploding On-Demand Recovery

China’s Iron Ore Futures Are Exploding On-Demand Recovery

Capacity utilization rates of blast furnaces at 247 steel plants over the country were at 86.42% this week, data from Mysteel consultancy showed, up from 84.95% the week earlier and at the highest level after late July in 2021.

The most-active iron ore futures on the Dalian Commodity Exchange (DCIOcv1) for September delivery bounced as much as 3.9% to 925 yuan ($145.19) a tonne. They were higher by 2.7% to 914 yuan as of 0330 GMT.

Spot 62% iron ore for delivery to China (SH-CCN-IRNOR62) increased by $1 to $153 a tonne on Thursday.

According to Zhuo Guiqiu, an analyst with Jinrui Capital, steelmakers are resuming production to replenish demand in the downstream sectors.

Dalian coking coal futures (DJMcv1) earned 3% to 3,159 yuan a tonne; moreover, coke prices (DCJcv1) rose 1.3% to 4,223 yuan per tonne.

The country’s state planner stated it had approved 32 fixed-asset investment projects this year, counting 520 billion yuan. It is studying plans for a new policy reserve to expand investment in the manufacturing sector.

Steel Consumption in China Is Booming

For October delivery, futures prices for construction material steel rebar on the Shanghai Futures Exchange (SRBcv1) bounced 1.3% to 5,049 yuan a tonne.

Hot-rolled coils (SHHCcv1), utilized in cars and home appliances, inched 0.8% higher to 5,191 yuan per tonne.

Noticeable consumption of main steel products, including the two materials in China, rose 3.5% as of Thursday from the week earlier, as stated by Reuters calculation based on production and inventory data that Mystee.

Finally, Shanghai stainless steel futures (SHSScv1) dropped 0.4% to 19,685 yuan a tonne.