SHANGHAI, Oct 9 (SMM) – Domestic steel mills' restocking for winter and broad consumption stimulus policies for the fourth quarter are expected to fuel a rally in Dalian iron ore prices in October, SMM believes.
Environmental restrictions across northern regions of China have been removed after the National Day holiday and this could also facilitate raw materials stockpiling by steelmakers.
Seaborne supplies are unlikely to put downward pressure on iron ore prices as SMM learned that shipments from major suppliers Brazil and Australia this month limitedly change from that in September.
The most-liquid iron ore January 2020 contract on the Dalian Commodity Exchange rose for five consecutive sessions by over 6% as of Tuesday October 8, from a low of 619 yuan/mt on September 25, likely driven by pre-holiday buying by steel mills.
The latest SMM data showed that iron ore stocks across 35 Chinese ports came in at 110.7 million mt as of September 27, down 1.23 million mt from a week ago and 22.82 million mt from a year ago.