The futures contracts iron ore extended their recovery path on Tuesday, with easing concerns about the banking sector lifting benchmark steel prices in Shanghai, although lingering fears over the demand outlook in Chinathe world’s largest producer of steelhas limited earnings.
Falling Chinese port iron ore stockpiles also supported steelmaking ingredient prices, which reached oversold levels last week amid concerns mainly related to a drop in demand for construction steel.
The most traded iron ore for May on China’s Dalian Commodity Exchange ended daytime trade up 1.8% to 882 yuan ($128.11) a tonne. The contract rose 1.3% in the previous session, breaking a seven-session slump.
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On the Singapore Exchange, the benchmark iron ore in April rose 1.8% to $122.65 a tonne.
The regional creditor of USAFirst Citizens BancShares, acquired assets of bankrupt US bank Silicon Valley Bank on Monday, triggering a rally of relief in financial markets.
Analysts, however, said concerns over a global credit crunch that could dampen economic growth and demand for metals, along with steelmakers’ low-inventory strategy, production constraints and regulatory risks in China, are likely to hold gains. of iron ore under control.
A weak real estate market in China should also keep sentiment subdued, they say.
Meanwhile, any drop in iron ore prices could also be limited, especially with port inventory in China at its lowest level since early February, based on data from consultancy SteelHome.
“The market remains sensitive to short-term movements in port inventory,” National Australia Bank analysts said in a note.
Source: Moneytimes
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