Futures prices for steelmaking ingredients in China rose on Monday, iron ore jumped more than 4% and coke climbed to a 12-month high on strong demand as the world’s leading steelmaker continues to ramp up production.
The best-selling September contract for the supply of iron ore on the China Dalian Mercantile Exchange rose 4.3% to 873.50 yuan ($ 125.24) a tonne in early trading.
September contracts for iron ore on the Singapore Exchange rose 2% to $ 108.08 a tonne.
Dalian coke for September delivery rose 3% to Yuan 2,032 a tonne, the highest since July 29 last year.
“The average daily production of molten iron at steel mills has reached a new high, reaching 2.5 million tonnes, mainly due to the recent resumption of production of blast furnaces in some regions,” said analysts at Sinosteel Futures Co Ltd in Beijing.
Chinese steel mills remain profitable despite higher raw material costs prompting them to keep blast furnaces running at higher speeds, they said, adding that they saw “strong support” for coke, which is used in iron ore smelting.