Iron Ore Rises Most Since October as China Mills Seen Restocking
The price of iron ore delivered to China, the largest importer, gained 3.9 percent, the most since October, amid speculation the country’s steel mills are re- stocking after stockpiles of the alloy fell to a three-year low.
Ore with 62 percent iron content at the port of Tianjin climbed to $144.90 per dry metric ton, the highest since May 3, according to The Steel Index. That’s the largest one-day gain since Oct. 9 and means the price advanced 25 percent this month.
“The re-stocking cycle may be starting in China on a pick- up in steel consumption while steel inventory is at its lowest point since end-2009,” analysts including Johnson Leung at Jefferies Group Inc. in Hong Kong said in an e-mailed report today, citing data from Mysteel.
Iron-ore is reversing a slump from Sept. 5, when the cost slid to the lowest in nearly three years amid stalling steel demand in China, the biggest producer. Still, the price of imported ore is rising faster than domestically produced supply, which may curb demand for shipments, according to Jefferies.
Steel reinforcement-bar futures in China had their biggest monthly gain in 3 1/2 years after data showed the country’s manufacturing expanded in December. Rebar for delivery in May rose 1.8 percent to end at 3,988 yuan ($640) a metric ton on the Shanghai Futures Exchange, the highest closing price for the most active contract since July 10. Prices gained 14 percent in December, the most since July 2009.
“There is just more confidence in the physical market,” Ben Goggin, a broker of iron-ore swaps at ICAP Plc in London, said by e-mail today. “Sentiment is pushing steel futures up, sentiment is driving Chinese demand, and there’s tighter supply in China.”
To contact the reporter on this story: Michelle Wiese Bockmann in London at email@example.com
To contact the editor responsible for this story: Alaric Nightingale at firstname.lastname@example.org