Os future contracts of iron ore rose on Friday (11) and move to the third consecutive weekly gain, supported by renewed hopes that the repression of China Price war will pave the way for another round of renovations to contain excess capacity in the steel industry.
The most negotiated iron ore contract on the Dalian Goods Stock Exchange (DCE) in China ended the day’s 1.8%up negotiations at 764 Iuanes (US $ 106.56) the ton.
The August reference iron ore on the Singapore Stock Exchange rose 0.14%at US $ 99.15 a ton.
Both reference rates have risen more than 3.5% so far this week.
The feeling in the ferrous market was mainly fueled by production restrictions related to environmental protection in Tangshan, the main steel production center in China, and the hopes of reforms on the offer side, said Jiang Mengtian, the main analyst of consulting firm Horizon Insights.
“The steel market was the most benefited, as reflected in future prices and a wave of storage by consumers downstream, which helped raise iron ore prices,” Jiang said.
The increase in ore prices occurs despite the weaker demand.
Daily medium-ray production, an indicator of iron ore demand, dropped 0.6% over the previous week, to 2.39 million tons in the week until July 10, the lowest level from April 3, according to data from Mysteel consultancy.
Other steel manufacturing ingredients in the Dalian stock exchange have gains, with the metallurgical coal and bun up 3.34% and 2.81%, respectively.
Last week, important China leaders promised to intensify regulation on aggressive price cuts by Chinese companies, which later fueled speculation about possible supply reforms in various excess capacity affected sectors.
