Dalian iron ore extends gains on China demand hopes, profit-taking caps rise
Updates closing prices
BEIJING, April 25 (Reuters) - Dalian ironore futures prices extended their risefor a second straight session on Thursday, supported by lingering demand hopes in top consumer China, although some profit taking limited gains.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 1.03% higher at 879.5 yuan ($121.36) a metric ton, after rising more than 3% on Wednesday.
The benchmark May iron ore SZZFK4 on the Singapore Exchange, however, surrendered early gains to dip 0.36% to $117.5 a ton, as of 0700 GMT. It climbed more than5% on Wednesday.
Analysts at Soochow Futures said in a note that rising steel output and demand heightened expectations of higherhot metal output.
"The market had opted to trade the apparent construction steel demand data in advance, with some participants pegging it at 2.87 million tons, a rise of 65,000 tons from the previoussession," analysts at Shengda Futures said in a note.
The price gains have slowed after the DCE on Wednesday unveiled plans to adjust the trading volume of open positions with delivery in May and September for some clients to 500 lots from Friday to tame speculation.
"Some investors closed their long positions to cash in profits after the announcement of trading limits, capping price rise today," said Pei Hao, a Shanghai-based analyst at international brokerage Freight Investor Services (FIS).
Other steelmaking ingredients on the DCE advanced further, with coking coal DJMcv1 and coke DCJcv1 up 2.12%and 0.98%,respectively.
Steel benchmarks on the Shanghai Futures Exchange edged up. Rebar SRBcv1 ticked 0.03% higher, hot-rolled coil SHHCcv1 added 0.08%, wire rod SWRcv1 inched up 0.26%and stainless steel SHSScv1 climbed 1.16%.
Although most downstream construction enterprises surveyed are holding low inventory and showed some willingnessto restock steel products, the majority of them chose to delay the time of stockpiling, a survey from consultancy Mysteel showed on Wednesday.
Nearly 81% of surveyed enterprises expect steel prices to weaken after the May Day holiday break, according to Mysteel.
($1 = 7.2470 Chinese yuan)
Reporting by Amy Lv and Andrew Hayley; Editing by Mrigank Dhaniwala and Eileen Soreng
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