Iron ore futures rose for a fourth straight session on Friday and were heading for a second weekly gain, as a softer dollar and higher bets of a U.S. interest rate cut overshadowed muted demand recovery in top consumer China after a military parade.

The benchmark October iron ore on the Singapore Exchange erased earlier loss to trade 0.28% higher at $105.1 a metric ton, as of 0814 GMT.

It has gained 1.6% so far this week, partly supported by a soft dollar amid bets of a U.S. Federal Reserve rate cut.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.77% higher at 789.5 yuan ($110.37) a ton, recording a weekly rise of 0.3%.

The price rally in the coal market was ascribed by some analysts as drivers for the ore price strength the afternoon.
Coking coal and coke (DCJcv1), other steelmaking ingredients, surged 6.3% and 4.7%, respectively, aided by renewed concerns over supply reduction.

Earlier in the morning session, both ore contracts retreated from multi-week high in the prior day as a sharper-than-expected fall in demand weighed.

Average daily hot metal output, a gauge of iron ore demand, slid by 4.7% from the prior week to 2.29 million tons in the week as of September 4, the lowest since February 28, data from consultancy Mysteel showed.

Market participants had expected a sharper output fall this week due to the production curbs in the top steelmaking hub, Tangshan, for the military parade on September 3 to commemorate the end of World War Two, but a fall of nearly 5% hit some traders and analysts by surprise.

Growing iron ore supply also limited the upside room for prices.

Steel benchmarks on the Shanghai Futures Exchange mostly gained ground on higher raw materials costs.
Rebar, hot-rolled coil and wire rod (SWRcv1) climbed 1%, while stainless steel shed 0.3%.
Source: Reuters