Iron ore rebounds to over six-week high on renewed China demand hopes, lower shipments
BEIJING, April 24 (Reuters) -Iron ore futures prices rebounded on Wednesday to their highest levelin oversix weeks, aidedby renewed hopes of improved steel demand in top consumer China and expectations of lower supply after a major miner lowered itsannual shipment outlook.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended morning trade 2.55% higher at 883.5yuan ($121.94) a metric ton, its highest since March8. It fell more than 1.5% on Tuesday.
The benchmark May iron ore SZZFK4 on the Singapore Exchange climbed 4.54% to $117.9a ton, as of 0332 GMT, the highest since March7.
Iron ore fundamentals have improved and the valuation of the ferrous market is expected to rise, analysts at Galaxy Futures said in a note.
"The issuance of the special bonds is expected to speed up ahead, while the improvement in steel demand may sustain as construction steel consumption will continue to recover and the manufacturing sector-led steel demand will likely remain resilient."
Special bonds are typically used to fund infrastructure projects.
Thestate planner said on Tuesday that it would guide local governments to accelerate the progress of project construction and fund use, withanalysts at Zijintianfeng Futures anticipatinghot metal output to pick up further in thecoming weeks.
Sentiment was also boosted after Australia's Fortescue FMG.AX, the world's fourth-largest iron ore supplier, on Wednesday logged a bigger-than-expected decline in third-quarter iron ore shipments, following a derailment of ore cars and weather disruptions that led to a slight cut in its outlook for annual shipments.
Other steelmaking ingredients on the DCE also gained, with coking coal DJMcv1 and coke DCJcv1 up 1.07% and 1.24%, respectively.
Steel benchmarks on the Shanghai Futures Exchange edged higher. Rebar SRBcv1 ticked up 0.49%, hot-rolled coil SHHCcv1 added 0.5%, wire rod SWRcv1 advanced 0.24% while stainless steel SHSScv1 was little moved.
($1 = 7.2454 Chinese yuan)
Reporting by Amy Lv and Mei Mei Chu; Editing by Sonia Cheema
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