Iron-ore rangebound as surging fuel costs offset high portside China stocks
Iron-ore futures prices were stuck in a tight range on Monday, as investors assessed the cost impact of elevated energy prices and a pickup in steel demand in top consumer China against high portside stocks.
The most-traded iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 closed daytime trade up 0.06% at 813 yuan ($117.68) a metric ton.
The benchmark May iron ore SZZFK6 on the Singapore Exchange was up 0.26% at $106.25 a ton, as of 07:06 GMT.
Prices of the key steelmaking ingredient have found some support from rising costs fuelled by surging energy prices stoked by the Middle East conflict.
Moreover, traders and analysts were closely monitoring whether tight diesel supply will impact production in key suppliers such as Australia, although "it does not seem imminent production cuts are likely", analysts at JP Morgan said in a note last week.
Also, expectations of improving steel demand in China incentivised restocking of raw materials, including iron ore.
However, Chinese portside iron ore stocks stayed high despite a moderation, curbing room for price gains.
Ore inventory at 47 major Chinese ports hit a record high at 179 million tons earlier this month before falling to 177-million tons in the week to March 27, data from consultancy Mysteel showed.
Market focus is also on the development surrounding negotiations between China's state iron ore buyer and the world's third-largest supplier BHP, with their protracted dispute on the supply contract aggravating price volatility.
Other steelmaking ingredients were mixed, with coking coal DJMcv1 down 0.33% and coke DCJcv1 up 0.2%, respectively.
Steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar SRBcv1 added 0.58%, hot-rolled coil SHHCcv1 rose 0.33%, wire rod SWRcv1 climbed 0.42% and stainless steel SHSScv1 edged up 0.17%.
