Iron ore prices gained for the third straight session
on Monday, rising more than 5% in China, while steel rebar and hot-rolled coils
increased amid production controls due to power cuts.
According to
Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were
changing hands for $119.31 a tonne, up 7.2% from Friday’s closing.
Benchmark iron ore futures on the Dalian Commodity
Exchange, for January delivery, rose as much as 5.3% to 715 yuan ($110.57) per
tonne in morning trade. They closed up 3.5% to 703 yuan a tonne.
China’s massive
industrial base has been wrestling with sporadic jumps in power prices and
usage curbs since at least March, when provincial authorities in Inner Mongolia
ordered some heavy industry, including an aluminum smelter, to curb use so that
the province could meet its energy use target for the first quarter.
“Most bad news comes
from China these days,” Ipek Ozkardeskaya, a senior analyst at Swissquote Group
Holdings, wrote in a note.
“The Evergrande debt crisis, the Chinese energy crackdown on
missed targets and the ban on cryptocurrencies have been shaking the markets,
along with the Fed’s more hawkish policy stance last week.”
EXPLAINER-What is behind China’s power crunch?
Analysts with GF
Futures, however, said the gains in steelmaking ingredient prices were a
bounce-back from previous losses, but they are not sustainable, as demand at
mills continued to ease.
Capacity utilisation
rates of 247 blast furnaces at steel plants across China stood at 82.06% last
week, down from 83.74% the week earlier, data from Mysteel consultancy showed.
“There is no relief on
production cut pressure, as the government is asking more provinces around
Beijing to cut their steel production to improve air quality ahead of the
Winter Olympics next year,” ANZ senior commodity strategist Daniel Hynes said.
Construction used
rebar rose 1.0% to 5,564 yuan ($861) a tonne. Hot-rolled coils, used in the
manufacturing sector, inched 0.6% higher to 5,592 yuan ($866) per tonne at
close.
(With files from Reuters and Bloomberg)
Mining.com