Iron ore futures locked in a fifth consecutive weekly gain, overcoming an early decline on Friday even as rising port inventories and weaker global steel production weighed on prices.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.11% lower at 802.5 yuan ($112.01) a metric ton.

The contract rose nearly 1% this week.

The benchmark August iron ore on the Singapore Exchange was 2% lower at $102.95 a ton, as of 0717 GMT, but gained 2.16% overall this week.

Global steel production in June fell 5.8% year-on-year, while crude steel output from top producer and consumer China dropped 9.2% during the same period, data from the World Steel Association showed.

Total iron ore stockpiles across ports in China climbed 0.11% week-on-week to 131 million tons, as of July 25, according to SteelHome data, adding further pressure to prices.

Hot metal output, a gauge of iron ore demand, was down 0.1% week-on-week, according to data from consultancy Mysteel.

Still, the operating rate of blast furnaces in China edged higher in the week ended July 25 to reach 83.46%, up 0.31 percentage points from the previous week, Mysteel said in a separate note.

Although the growth rate of steel demand for the overall manufacturing industry has slowed down, resilience in prices is expected to continue, said broker Galaxy Futures.

Investors are keeping an eye on next week’s Politburo meeting that will shape economic policy for the rest of the year.

Other steelmaking ingredients on the DCE surged, with coking coal NYMEX:ACT1! and coke (DCJcv1) up 7.98% and 2.38%, respectively.

Steel benchmarks on the Shanghai Futures Exchange all increased. Rebar RBF1! gained 2.32%, hot-rolled coil EHR1! climbed 1.98%, wire rod (SWRcv1) rose 1.55% and stainless steel HRC1! edged 0.93% higher.
Source: Reuters