China’s iron ore futures hit a three-week high as the number of new coronavirus cases in the country continued to fall and after Brazilian miner Vale SA posted a sharp drop in fourth-quarter output of the steelmaking raw material.
The Dalian Commodity Exchange’s most-traded iron ore contract gained as much as 3.2 percent to 619.50 yuan ($88.94) a ton in morning trade. That was the highest since Jan. 23, a day before the onset of the Lunar New Year break that was extended to Feb. 2 because of the epidemic.
Iron ore futures on the Singapore Exchange advanced 0.8 percent to $84.40 a ton.
Spot iron ore prices also scaled three-week highs, with the benchmark 62 percent grade settling at $85 a ton on Tuesday, SteelHome consultancy data showed, amid a gradual reopening of factories.
“There are no significant changes in fundamentals, but things are improving in terms of demand due to business restarts,” said Richard Lu, senior analyst at commodity consultant CRU in Beijing.
But caution should prevail, he said.
“The government is now pushing hard on business restarts, but these should be in an orderly manner and well organized. This means that we are still away from getting normality, and demand will continue to be weak despite improving,” Lu said.
China’s Hubei, the province at the epicenter of the outbreak reported 94 additional deaths and 1,068 new infections as of Tuesday, down from a peak of over 3,000 new cases on Feb. 4, and the lowest number of new cases since Jan. 31.
That added to optimism that the worst of the epidemic, which has so far killed more than 1,100 people in China, may have passed, after the government’s senior medical adviser said the outbreak could be over by April. – Reuters
