China iron ore surges on supply crunch concerns
Jun. 11, 2019 8:29 AM ET|About: AK Steel Holding Corporation (AKS)|By: Carl Surran, SA News Editor
Global metals and mining stocks trade higher after China iron ore futures jump 6% on speculation that demand will continue to exceed production over the coming months: MT +6.3%, CLF +4.8%, FCX +4.1%, AKS +3.9%, X +3.7%, BHP +3.2%, NUE +2.9%, RIO +2.7%, XME +2.6%.
Reuters reports the most-traded iron ore futures on the Dalian Commodity Exchange hit a daily upper-trading limit with a 6% rally to 760.5 yuan/mt ($109.97); benchmark Shanghai rebar prices rose 3.5% and hot-rolled coil climbed 2.7%.
"Tight supply is unlikely to be eased in the short term, but demand for iron ore will be robust despite the moderation of profit margins at steel mills," according to analysts from Huatai Futures.
Inventory of imported iron ore at Chinese ports reportedly has fallen to 121.6M metric tons, its lowest level in two and a half years, while utilization rates at steel mills across China stood at a relatively high 71.44% as of June 7, according to data from Mysteel, underlining strong demand for the ferrous metal, although mills in the top steelmaking city of Tangshan have been ordered to reduce production in June.