By Amy Lv and Lewis Jackson
BEIJING (Reuters) -Iron ore futures prices climbed on Friday to their highest levels in more than four months and headed for a weekly gain, as signs of recovery in steel consumption brightened demand outlook in top consumer China, where hopes of more stimulus revived.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.51% higher at 838.5 yuan ($115.75) a metric ton after touching the highest since October 8, 2024, at 844 yuan a ton earlier in the session.
The benchmark March iron ore <SZZFH5> on the Singapore Exchange added 0.06% to $108.75 a ton by 0711GMT, after hitting the highest since October 8, 2024, at $109.3.
Both benchmarks posted rises of around 3% so far this week.
Downstream steel consumption has shown signs of picking up with transaction volumes of construction steel products jumping by 44% on the week to 112,600 tons on Thursday, data from consultancy Mysteel showed, supporting ore prices.
“Expectations of growing rebar demand strengthened amid the upcoming peak construction season (in March) with the weather getting warm,” analysts at COFCO Futures said in a note.
Also buoying sentiment was China’s central bank, which vowed on Thursday to provide strong financial support for the healthy development of private economy and the growth of private enterprises.
However, the average daily hot metal output, a gauge of iron ore demand, slipped for a second straight week by 0.2% from the prior week to 2.28 million tons as of February 20, the Mysteel survey showed, limiting gains.
Other steelmaking ingredients on the DCE gained, with coking coal and coke up 2.12% and 1.77%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange advanced. Rebar rose 0.9%, hot-rolled coil edged up 0.81%, stainless steel ticked 0.38% higher while wire rod shed 0.17% .
“Given that there might be policies to stabilise economic growth unveiled in March, we expected steel prices to remain resilient until mid-to-late March,” COFCO’s analysts added.
($1 = 7.2440 Chinese yuan renminbi)
(Reporting by Amy Lv and Lewis Jackson; Editing by Janane Venkatraman)
