Iron ore’s most-active August contract on the Singapore Exchange jumped 1.5% to $210.95 a tonne.
A consensus is emerging among industry leaders and market analysts that China’s steel demand will ease in the second half of 2021, which may slow mills’ iron ore purchases.
“The growth of China’s steel demand in the second half will be slower than the first half,” said Wang Yingsheng, chief economist of the China Iron and Steel Association (CISA), while speaking at the opening ceremonies for the three-day Singapore International Ferrous Week.
Unfavourable weather in top steel producer China has slowed construction activity, while demand for manufacturing-used steel will also drop as export orders fall, said Wang.
“As we enter the second half of the year, all eyes will be on the extent to which Chinese demand slows and Brazilian supply grows,” said Rohan Kendall, iron ore research head at Wood Mackenzie.
“Progress is slow-going for Vale on its ‘pathway to 400 million tonnes per year’,” he said, referring to the Brazilian iron ore miner’s struggle to increase output, which declined following a dam collapse in 2019.
As shipments from miners fell, China’s iron ore imports dropped for a third straight month in June.
Benchmark 62%-grade iron ore’s spot price in China remains well supported above $200 a tonne.
Construction steel rebar on the Shanghai Futures Exchange was down 1.3% by the end of morning trade, while hot rolled coil slipped 0.8%. Stainless steel edged up 0.1%.
Dalian coking coal climbed 2.6%, while coke was virtually flat.
(Reporting by Enrico Dela Cruz in Manila and Min Zhang in Beijing; Editing by Subhranshu Sahu)