Iron Ore Prices in China Hit Eight Month Record Amid Expectations of Consumption Recovery

Iron ore futures in China climbed 4% on Wednesday, hitting their highest level in more than eight months, as trading resumed after the holidays.

As demand from steel manufacturers started to recover from pandemic disruption, the most-active iron ore futures on the Dalian Commodity Exchange rose as much as 4.1% to 945 yuan ($148.49) per tonne.

While the iron and steel consumption in China has dropped because of the sluggish property market, iron ore destocking has started. Iron ore inventories were at 155.6 million tonnes last week, down by 4 million tonnes from a week earlier and 3.3% down from mid-February’s peak.

Iron ore demand is on the rise as expectations that China will stabilize the economy and stimulate the property sector.

Benchmark 62% Fe fines imported into Northern China traded for $159.29 a tonne during morning trading, down 0.8% compared to Tuesday’s closing.

Downstream demand of steel rebar has been postponed due to the pandemic, and consumption is expected to recover amid relatively easy credit.

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