SHANGHAI, May 8 (SMM) – The most-active September iron ore contract on the Dalian Commodity Exchange (DCE) climbed as much as 3% on Friday May 8 to hit the highest level over more than the past month, ending higher for the fifth consecutive day at 633 yuan/mt, up 2.59%.
A surge in demand from Chinese steel mills was the major driver behind the elevated futures, as steel producers increased purchases before and after the Labour Day holiday. SMM data and industry data showed that domestic steel products inventories extended a downtrend, indicating healthy demand from end-users.
Some steel mills turned to focus on production with iron ore as they faced difficulties in securing steel scrap, another raw material for steel producing by using electric arc furnace (EAF).
SMM expects stable demand from steel plants to continue to support near-term iron ore prices.
SMM assessed the spot prices of PB fine (61.5% Fe) at Qingdao port at an average 665 yuan/wmt as of May 8, up 10 yuan/wmt from the prior day and up 20 yuan/wmt from end-April.
