Continuing their upward trend, Dalian iron ore futures recorded gains for the third consecutive session on Wednesday, fueled by optimism surrounding a potential surge in demand from steelmakers in China, the world’s largest consumer of iron ore. The most-traded May iron ore contract on China’s Dalian Commodity Exchange closed 1.23% higher at 823.5 yuan ($114.39) per metric ton, reflecting growing expectations of increased production among steelmakers. The rise in hot metal output, a key indicator of ore demand, is expected to enhance the appeal of iron ore, particularly following a significant price drop that has bolstered its cost competitiveness. Analysts noted that the recent fall in prices has stimulated opportunistic buying activities, while transaction volumes at major Chinese ports surged by 20% day-on-day to 1.27 million tons on Tuesday.
However, the benchmark April iron ore on the Singapore Exchange experienced a slight decline to $105.6 per ton, weighed down by concerns regarding the timing and scale of demand recovery and elevated portside ore stocks. Despite the divergence in prices between Dalian and Singapore exchanges, the positive momentum in iron ore prices underscores the dynamic nature of the market influenced by evolving demand patterns and supply dynamics.