Prices of Dalian iron ore futures edged higher on Thursday, supported by pre-holiday restocking activity.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) was 0.25% higher at 805.5 yuan ($113.04) a metric ton.

The benchmark September iron ore on the Singapore Exchange was 0.09% lower at $105.6 a ton, as of 0711 GMT.

The market is closely watching the fallout from a contract dispute between China and leading miner BHP BHP after state trading agency China Mineral Resources Group advised steel mills to halt purchases of BHP’s Jinblebar blend fines – a key iron ore product commonly used in Chinese sintering operations, said analysts from ANZ.

Typhoon Ragasa might have impacted demand at some construction sites in South China, though it may recover after the Chinese National Day holiday as weather conditions improve, said broker Galaxy Futures.

High levels of hot metal production, a gauge of iron ore demand, provide a window for pre-holiday restocking, offering support to ore prices, said Chinese broker Hexun Futures.

Still, end-user demand during the golden September-October period remains to be seen, with steel mill profits under pressure, Hexun said.

Global crude steel production in August rose 0.3% year-on-year to 145.3 million tons, according to World Steel Association data, while crude steel output from top producer and consumer China fell 0.7%.

Elsewhere, the European Union is seeking to eliminate or substantially reduce tariffs on steel and aluminum exports to the U.S., though the world’s largest economy has not yet responded to the proposal.

Other steelmaking ingredients on the DCE rose, with coking coal and coke (DCJcv1) up 0.98% and 2%, respectively.

Steel benchmarks on the Shanghai Futures Exchange mostly gained ground. Rebar RBF1! rose 0.32%, hot-rolled coil EHR1! climbed 0.24%, and stainless steel HRC1! increased 0.19%, while wire rod (SWRcv1) dipped 0.37%.
Source: Reuters