On the last day of April, the Chinese futures for iron ore on the Dalian commodity exchange rose 2.1% to $94,8 per ton – the highest figure for the last two weeks.
Chinese iron ore rises in price for the fifth consecutive month, analysts said Reuters.
The reason – Chinese steel mills and traders replenish stocks of raw materials on the background of the production limitations and in anticipation of the holiday weekend – from may 1 to may 3.
In General, iron ore in April rose by 12%. The growth rates at most led to supply disruptions of raw materials after the January accident at Vale mine in Brazil.
“On the eve of a long weekend in China made some attempts to replenish stocks,” said Richard Lu, an analyst at consulting company CRU in Beijing.
According to him, the reserves of iron ore continue to decline across the supply chain, which indicates a good demand for steel.
“Seasonal demand improvement will continue to support steel prices. Construction work is usually resumed in may and June, when favorable weather,” added Lou.
However, any further attempts to increase production of iron ore can be suspended due to the uncertain forecast of demand for steel in China.
According to Lou, at the moment the raw material is considered “very expensive”, so Chinese steel mills remain cautious to purchase the raw materials only when necessary.