Futures buoy iron ore prices, but mill restrictions still loom over market

A surge in the ferrous futures market gave some backing to iron ore prices on Friday October 20, but government-imposed production cuts among mills in north China continued to take a toll on demand.

Key drivers China’s ferrous futures soared across the board during the day, with the benchmark January iron ore contract gaining 5.4% while the May contract jumped 6.8% to end even higher than the former. Production cuts to be imposed on blast furnaces in a number of cities in the northern region during the November 15-March 15 heating season have dampened expectations for iron ore demand and shifted the price curve backwardation to a contango, a trader in Singapore told Metal Bulletin. While there appeared to be no let-up in the number of seaborne iron ore cargoes being offered during the day – a transaction involving Pilbara Blend fines was even reported at $2 per tonne higher than Thursday – there was little improvement at Chinese ports in terms...

Published

July Zhang

October 20, 2017

12:17 GMT

Shanghai