Reuters April 9, 2020 2:02 PM

China iron ore futures jump as mills restock raw materials.

* Iron ore futures up more than 2% in early trade

* Spot 62% iron ore rises to $83.5 per tonne

BEIJING, April 9 (Reuters) - Iron ore futures in China jumped on Thursday as profit at mills picked up amid signs of a recovery in demand and as steel mills restocked raw materials.

The most-traded iron ore futures on the Dalian Commodity Exchange, for September delivery, jumped as much as 2.5% to 593 yuan ($83.93) per tonne in early trade. It was up 1.9% at 590 yuan a tonne, as of 0330 GMT.

The May futures contract, meanwhile, gained as much as 2.4% to 658 yuan ($93.13) per tonne, the most in almost two weeks.

“The rise in September contract is mainly due to recovering profits at steel firms,” according to Zhuo Guiqiu, an analyst with Jinrui Futures.

Rebar profit margin in north China touched 500 yuan per tonne, as of April 8, compared with a plunge to as low as 34 yuan tonne last month, according to Jinrui Futures.

The May contract jumped on rising utilisation rates at mills, and as contract prices clinched closer to spot price of about 674 yuan per tonne as it’s due to deliver soon, Zhuo said.

Weekly capacity utilisation rates at 247 mills tracked by Mysteel consultancy climbed for a fourth consecutive week to 77.8%, as of April 3, implying higher demand for raw materials.

The most active construction rebar on the Shanghai Futures Exchange, for Oct delivery, rose 1.9% to 3,288 yuan a tonne.

Hot-rolled coil, used in cars and home appliances, gained 1.2% to 3,128 yuan per tonne.

FUNDAMENTALS

* Dalian coking coal rose 0.5% to 1,227 yuan a tonne and Dalian coke edged up 0.3% at 1,764 yuan a tonne.

* Shanghai stainless steel, for June delivery, rose 0.7% to 12,215 yuan a tonne.

* Prices for spot cargoes of benchmark iron ore with 62% iron content for delivery to China rose to $83.5 a tonne on Wednesday.

* China will help improve access to credit for small- and medium-sized firms as well as private companies hit hard by the coronavirus pandemic, the state council’s financial stability committee said after a meeting chaired by Vice Premier Liu He.

* Global miner Rio Tinto will go ahead with its $3.7 billion dividend payment this month, its chairman told shareholders on Wednesday, as a weaker global economy forces some of its peers to forgo payouts.