China’s steel and iron ore futures rose on Tuesday on expectations that many halted construction activities in the country will soon resume, boosting restocking demand for the commodities.
The most-active construction steel rebar contract on the Shanghai Futures Exchange climbed 2.1 percent to as high as 3,806 yuan ($567.03) a tonne.
Hot rolled coil rose as much as 2.4 percent to 3,775 yuan a tonne.
The most-traded iron ore contract on the Dalian Commodity Exchange was up as much as 1.4 percent at 609.5 yuan a tonne.
“Steel prices should rise after we saw less output last week, and with demand expected to improve, especially in the construction sites, because the weather is getting better,” said analyst Richard Lu of CRU in Beijing.
“Demand for steel flat products has been particularly robust now maybe because of some restocking, as inventories have fallen,” he said.
Iron ore’s modest gains also followed news that the town of Mangaratiba, in Brazil’s Rio de Janeiro state, fined top iron ore miner Vale SA and closed its Ilha da Guaiba port terminal for the second time this year.
Around 40 million tonnes of iron ore go through Vale’s Ilha da Guaiba terminal yearly, according to Brazil’s port regulator. The terminal was ordered to be closed on Monday due pollution problems and the alleged lack of an operating license.
Other steelmaking raw materials were also higher, rebounding from several days of losses.
Dalian coking coal edged up as much as 0.4 percent to 1,236 yuan a tonne, while coke inched up as much as 0.6 percent to 2,002.5 yuan.
Reporting by Enrico dela Cruz, Editing by Sherry Jacob-Phillips