The price of iron ore in future markets has risen above 680 yuan in China per ton. This price increase has occurred due to signs of stronger demand in the largest consumer of this material, namely China. This price rise follows four consecutive years of decline and comes after an improvement in steel production in the country.
Increase in Hot Iron Production in China
According to industrial data, daily hot iron production in China, which is one of the key indicators of iron ore demand, has increased to 2.36 million tons. This increase of 3,700 tons represents the second consecutive weekly rise following the resumption of blast furnace operations after a maintenance period.
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Blast Furnace Operating Rates
The operating rate of blast furnaces in the surveyed plants also reached 87.3 percent in the week ending October 28, indicating a 0.14 percent increase compared to the previous week. This increase is a sign of improvement in China's steel industry and rising demand for iron ore.
At the same time, freight rates on routes from Australia to China and Brazil to China are also steadily increasing, which provides further support for iron ore prices. However, Chinese steel mills are still in a loss-making situation, and domestic steel demand remains weak.
Moreover, global iron ore production has been significantly high, which could negatively impact further price increases. Currently, the state of steel production and demand in China, as one of the largest iron ore markets, will significantly influence global prices of this material.
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