Iron ore forward swaps continued to edge higher even as spot prices steadied, backed by expectations demand from China will recover in the last quarter of 2010.
China may relax or lift power supply curbs to several steel mills that were either shuttered or told to cut output earlier, traders said, a move that should boost demand for iron ore, a key ingredient in making steel.
"The market will be good from October because steel production capacity is coming back," said an iron ore trader in China''s Hangzhou.
China earlier this month ordered about 18 steel mills in Hebei to shut down operations for up to one month and told another 30 in the capital Tangshan to slash output by up to 70 percent from September as the country rushes to meet a five-year energy efficiency target that ends this year. [ID:nTOE686028]The October swap contract SGXIOc2, settled against The Steel Index benchmark and cleared by the Singapore Exchange, rose $1.73 to $136.10 a tonne at the end of trade on Monday.
The November contract SGXIOc3 jumped $2.55 to $134.30 a tonne while December SGXIOc4 rose $2.63 to $133.00.