Iron ore firms on China pre-holiday restocking, demand uncertainty caps gains

Iron ore prices extended gains for a second consecutive session on Thursday, according to Business Recorder, as Chinese steel producers increased purchases of seaborne cargoes ahead of a week-long holiday. The most-traded contract on the Dalian Commodity Exchange rose 0.35 per cent to 711 yuan ($105.94) a metric ton, while the October benchmark in Singapore edged up 0.26 per cent to $96.05 a ton. The Singapore price has remained below the key $100 psychological level for six straight sessions.

Several mills booked cargoes for the National Day break running from October 1 to 7, and daily seaborne volume jumped 43 per cent to 1.41 million tons on Wednesday, according to Mysteel data. Coking coal and coke also firmed, gaining 1.18 per cent and 1.31 per cent respectively, while steel futures in Shanghai also rose, with stainless steel climbing 0.78 per cent.

Analysts cautioned that mills could scale back restocking, since tightening margins are discouraging them from raising output, which may cap any further price increases. Zhengxin Futures added that genuine steel demand has yet to show a clear recovery and has fallen short of earlier forecasts, although supply cuts continued as losses deepened.