BEIJING: Iron ore futures prices were stuck in a tight range on Monday, as investors assessed the cost impact of elevated energy prices and a pickup in steel demand in top consumer China against high portside stocks.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) was up 0.37% at 815.5 yuan ($117.84) a metric ton, as of 0219 GMT.
The benchmark May iron ore on the Singapore Exchange was little changed at $106.05 a ton, as of 0209 GMT.
Prices of the key steelmaking ingredient have found some support from rising costs fuelled by surging energy prices, although they have largely been little impacted by any immediate shocks stoked by the prolonged Middle East conflict.
Moreover, traders and analysts were closely monitoring whether tight diesel supply will impact production in key suppliers such as Australia, although “it does not seem imminent production cuts are likely”, analysts at JP Morgan said in a note last week.
Also, expectations of improving steel demand in China aided ore prices as better steel demand will incentivise restocking of raw materials including iron ore.
However, portside iron ore stocks stayed high despite a moderation, curbing room for price gains.
Ore inventory at 47 major Chinese ports hit a record high at 179 million tons earlier this month before falling to 177 million tons in the week to March 27, data from consultancy Mysteel showed.
Market focus is also on the development surrounding negotiations between China’s state iron ore buyer and the world’s third-largest supplier BHP, with their protracted dispute on supply contract aggravating price volatility.
Coking coal and coke, other steelmaking ingredients, advanced 0.21% and 0.4%, respectively.
Steel benchmarks on the Shanghai Futures Exchange gained ground.
Rebar added 0.61%, hot-rolled coil rose 0.3%, wire rod climbed 0.27% and stainless steel edged up 0.14%.
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