Iron ore futures in China rose for a second consecutive session on Thursday, supported by stronger-than-expected factory activity data that improved demand prospects in the world’s second-largest economy.
The most-active September contract on the Dalian Commodity Exchange increased by 0.51% to 787.5 yuan ($115.15) per metric ton as of 0222 GMT, bringing its weekly gain so far to 0.19%.
However, trading activity is expected to pause as Chinese markets will remain closed from May 1 to 5 for public holidays.
Meanwhile, the benchmark June iron ore contract on the Singapore Exchange edged down 0.06% to $106.35 per ton, though it has still recorded a weekly gain of 0.37%.
Recent data showed that China’s factory activity expanded for a second straight month in April, driven by stronger output and inventory building, indicating that economic momentum remains intact despite external pressures linked to the Middle East conflict.
The official manufacturing purchasing managers’ index (PMI) slipped slightly to 50.3 from 50.4 in March but stayed above the 50 threshold that separates expansion from contraction, according to figures released by the National Bureau of Statistics. The reading also exceeded market expectations of 50.1.
The data points to continued resilience in China’s economy following better-than-expected first-quarter growth. However, analysts caution that persistent inflationary pressures could dampen external demand, which remains crucial given relatively weak domestic consumption.
In corporate developments, Baoshan Iron & Steel Co reported an 8.6% year-on-year decline in first-quarter net profit, citing higher raw material costs linked to the Iran conflict.
Steel prices dropped 4.4% during the quarter, while iron ore prices rose 3.2%, compressing profit margins, according to the company, a subsidiary of China Baowu Steel Group, the world’s largest steelmaker by output.
Other steelmaking inputs on the Dalian exchange also strengthened, with coking coal and coke rising by 0.91% and 0.69%, respectively.
On the Shanghai Futures Exchange, most steel benchmarks posted gains. Rebar climbed 0.57%, hot-rolled coil rose 0.59%, and stainless steel increased 0.97%, while wire rod declined by 1.01%.
