Iron ore extends gains on softer dollar, pre-holiday replenishment
BEIJING, Nov 19 (Reuters) -Iron ore futures prices extended gains for a second straight session on Tuesday, supported by a softer U.S. dollar and the start of restocking seaborne cargoes among steelmakers in top consumer China to sustain production in January.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended morning trade 1.39% higher at 763.5 yuan ($105.59) a metric ton.
The benchmark December iron ore SZZFZ4 on the Singapore Exchange was 0.91% higher at $100.05 a ton, as of 0352 GMT.
A weaker dollar USD/ makes greenback-priced commodities less expensive for buyers holding other currencies.
"Data over the weekend showed that the issuance pace of local government debts has accelerated, indicating more capital available for property projects, boosting the ferrous market," said Pei Hao, an analyst at international brokerage Freight Investor Services (FIS).
"Moreover, $100 a ton is a key level that traders have been closely monitoring as once prices fall below the level, buying interest for seaborne cargoes picked up even amid high portside stocks."
Also underpinning prices of the key steelmaking ingredient is some mills kicking off buying seaborne cargoes to meet their production needs over the week-long Chinese New Year holiday break in January, said one Chinese steelmaker and one trader, both requesting anonymity as they are not authorised to speak to media.
"Such buying will lend some support to prices, preventing them from falling sharply, but it's far from sufficient for any strong price rebound given that portside stocks hovered at a pretty high level," FIS's Pei added.
Other steelmaking ingredients on the DCE posted gains, with coking coal DJMcv1 and coke DCJcv1 up 0.47% and 0.23%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar SRBcv1 added 0.8%, hot-rolled coil SHHCcv1 rose 0.55%, stainless steel SHSScv1 advanced 0.23% while wire rod SWRcv1 dipped 0.11%.
($1 = 7.2311 Chinese yuan)
Reporting by Amy Lv and Mei Mei Chu; Editing by Janane Venkatraman
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