China iron ore rises on support measures, lower port stocks.
* Iron ore port inventory down 9% yr-on-yr
* China central bank cuts medium-term lending rate
* Coronavirus cases rise again in China
MANILA, Feb 17 (Reuters) –
Iron ore futures in China edged higher in early trade on Monday,underpinned by data showing a drop in stocks of the steelmaking raw material atthe country’s ports, and after the central bank cut the interest rate on itsmedium-term lending.
China’s port inventory of imported iron ore dipped to 130.65 milliontonnes, as of last Friday, from 131.1 million tonnes a week earlier, Steel Homeconsultancy data showed. That was 9% down from 143.60 million tonnes a yearago. SH-TOT-IRONINV
The Dalian Commodity Exchange’s most-traded iron ore contract, whichexpires in May, was up 0.7% at 627.50 yuan ($89.97) a tonne by 0311 GMT.
Supply concerns have also lifted spot prices of China-bound iron ore,with the benchmark 62% grade settling at a three-week-high $88.50 a tonne onFriday, Steel Home data showed.
“Iron ore prices, both futures and spot prices, are supported by adecrease in iron ore inventory, signs of supply tightness and the positiveoutlook,” said Helen Lau, metals and mining analyst at Argonaut Securities inHong Kong.
Recent bad weather had caused delays in iron ore shipments fromAustralia and Brazil, while cargo unloading has also been hampered byquarantine requirements at ports, she added.
Lau also saw further support to iron ore prices from expectations ofadditional stimulus measures from Beijing to prop up the slowing Chineseeconomy.
On Monday, China’s central bank cut the interest rate on its medium-termlending as policymakers sought to ease the drag to the businesses from acoronavirus outbreak that has severely disrupted activity.
Keeping iron ore’s gains in check, however, China’s downstream steeldemand is widely expected to remain weak for some time as the coronavirusepidemic, which has now killed more than 1,700 people, shows no sign of easing.
A survey by Chinese steel industry data provider Mysteel showed thatamong 87 steelmakers that operate electric arc furnaces (EAF) in the country,only 18 mills and one independent EAF producer had resumed operations as oflast Wednesday.
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