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Chinese iron ore futures touched 900 yuan ($135.00) per tonne for the first time in nearly six weeks and logged a monthly gain, as hopes of a recovery in demand rose after financial hub Shanghai was set to reopen its city from lockdowns.
Officials in Shanghai announced an end to a two-month lockdown on Monday. The city will move into a normalised epidemic-control phase from Wednesday, allowing shops to reopen and people in “low-risk” area to return to work.
The development could boost downstream consumption, which was halted for months due to the recent COVID-19 outbreak and had disappointed metals producers as they could not cash in on the traditional peak season for construction projects.
China’s factory activity declined slower in May from the prior month, though economic growth in the second quarter still under doubts.
The most-active iron ore futures on the Dalian Commodity Exchange DCIOcv1 for September
delivery gained as much as 3.8% to 908 yuan per tonne in morning trade. They ended up 2.1% at 893 yuan per tonne and rose 2.6% in May.
Spot prices of iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62, compiled by SteelHome consultancy, was unchanged from the previous session at $136.5 a tonne on Monday.
Coking coal futures DJMcv1 on the Dalian bourse increased 2.8% to 2,695 yuan a tonne and coke prices DCJcv1 were up 2.5% at 3,512 yuan a tonne.
For the whole month, however, coking coal and coke fell 5.5% and 3.1%, respectively.
Steel prices on the Shanghai Futures Exchange were mixed, with construction material rebar SRBcv1 for October delivery gaining 1.5% to 4,684 yuan a tonne and hot rolled coils SHHCcv1 up 1.3% at 4,789 yuan per tonne.
The July contract of Shanghai stainless steel futures SHSScv1 slipped 1.2% to 18,290 yuan a tonne.
Source: Reuters