Iron ore futures prices rose for a second straight session on Wednesday, aided by falling shipments and resilient demand, although mixed factory data in top consumer China curbed the gains.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.68% higher at 736.5 yuan ($102.59) a metric ton.

The benchmark August iron ore (SZZFQ5) on the Singapore Exchange was up 0.24% at $96 a ton, as of 0700 GMT.

Iron ore shipments from top suppliers Australia and Brazil have fallen after a flurry of ramp-up by the end of the past quarter, analysts at Everbright Futures said.
Analysts at Galaxy Futures said prices would find some support from the supply side.

“Despite a slight fall, hot metal output still sat at a relatively high level and steel consumption from the manufacturing sector remains strong,” Galaxy’s analysts said.

Hot metal output is typically used to gauge iron ore demand.

Gains in iron ore futures were limited by data showing China’s consumer prices rose for the first time in five months in June, while its producer deflation deepened to its worst level in almost two years.

The world’s second-largest economy is still grappling with uncertainty over the global trade war and subdued demand at home, piling pressure on policymakers to roll out more support measures.

Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 3.81% and 2.43%, respectively.

“It’s more of a sentiment-driven rally as the recent crackdown on price war raised expectations of supply-side reforms in the coal sector,” said a Shanghai-based coal analyst on condition of anonymity as he is not authorised to speak to the media.

Steel benchmarks on the Shanghai Futures Exchange moved in a tight range. Rebar and hot-rolled coil were little changed, stainless steel added 0.35%, while wire rod dipped 0.42%.
Source: Reuters