Iron ore futures prices rose to a one-week high on Wednesday, helped by accelerated buying in the spot market as steelmakers in top consumer China began restocking feedstock for consumption during the Lunar New Year holiday in February.

The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! closed daytime trade up 1.25% at 768 yuan ($109.02) a metric ton, its highest since December 11.

The benchmark January iron ore (SZZFF6) on the Singapore Exchange was up 0.98% at $103.55 a ton, as of 0751 GMT, the highest since December 5.

Improved liquidity in the spot market lifted sentiment, analysts said.

Iron ore transaction volumes in the portside and seaborne markets jumped by 18.2% and 76.8%, respectively, on Tuesday, data from consultancy Mysteel showed.

With crude steel output in the first 11 months of this year down 4% year-on-year, there seems to be less pressure on further cuts in December to achieve a national target set earlier in the year.

Beijing pledged in March to restructure its giant steel industry through output cuts.

Easing concerns over a worsening property market also supported prices of the key steelmaking ingredient after Chinese property developer Vanke 000002 sweetened a bond extension proposal to avert debt default.

Seaborne iron ore prices (SH-CCN-IRNOR62) have averaged $103 in the fourth quarter, as of December 16, higher than the $95 forecast by Goldman Sachs.

Coking coal NYMEX:ACT1! and coke (DCJcv1), other steelmaking ingredients, climbed 0.33% and 1.93%, respectively.

Most steel benchmarks on the Shanghai Futures Exchange advanced. Rebar RBF1! edged up 0.1%, hot-rolled coil EHR1! nudged up 0.03%, stainless steel HRC1! added 0.2% while wire rod (SWRcv1) fell 1.94%.
Source: Reuters