Iron ore rises on renewed hopes of improving China demand
BEIJING, Aug 29 (Reuters) -Iron ore futures prices rose on Thursday, buoyed by renewed hopes of improving demand in top consumer China in the coming weeks, but caution about high inventories and concerns over the extent of recovery in downstream steel demand capped gains.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended morning trade 0.99% higher at 763.5 yuan ($107.21) a metric ton.
The benchmark September iron ore SZZFU4 on the Singapore Exchange climbed 1.34% to $102.15 a ton, as of 0342 GMT.
"We expect hot metal output to rebound next week although a continued fall will be seen this week," said Xie Qingwei, an analyst at consultancy Shanghai Metals Market (SMM).
Output of hot metal, a blast furnace product, is typically used to gauge iron ore demand.
Analysts at BMI revised down their 2024 iron ore price forecast from an annual average of $120 a ton to $110 a ton, as subdued demand in China continues to pressure the iron ore market.
"We expect negative sentiment over the sluggish Chinese property sector, the downfall of which now looks irreversible, to persist, further capping prices."
Other steelmaking ingredients on the DCE advanced, with coking coal DJMcv1 and coke DCJcv1 up 0.72% and 0.43%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar SRBcv1 added 0.4%, hot-rolled coil SHHCcv1 nudged up 0.15%, wire rod SWRcv1 shed 1.32% and stainless steel SHSScv1 was almost flat.
"Several steelmakers started equipment maintenance or production cuts amid loss sweeping through the whole industry, contributing to somewhat falling stocks and a rebound in steel prices," Jiang Wei, secretary general of the state-backed China Iron and Steel Association (CISA), said in a statement on CISA's WeChat account on Wednesday.
"But the rebound is still quite fragile....steel mills should continue exercise 'self discipline' to control production so as to lower stocks, adjust supply and demand fundamentals, stabilize the market and avoid the 'involution' style vicious competition," Jiang added.
($1 = 7.1215 Chinese yuan)
Reporting by Amy Lv and Mei Mei Chu; Editing by Rashmi Aich
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