MANILA – Dalian iron-ore futures surged past $100/t on Thursday, recovering lost ground as concerns about tightening supply of the steelmaking commodity from coronavirus-hit Brazil prevailed over a bleak outlook for global steel demand.
Iron ore on the Dalian Commodity Exchange closed 2.1% higher at 722 yuan ($101.67) a tonne, rising for a seventh straight session.
The Singapore Exchange's front-month contract also clawed back early losses, up 1.7% at $95.42 a tonne in afternoon trade.
After Brazilian iron-ore miner Vale cut its 2020 production outlook to 310-million to 330-million tonnes, from 340-million to 355-million tonnes previously, "more downgrades may be on the way as Covid-19 infections accelerate in Brazil's key mining provinces", said Morgans Financial in a note.
Hopes of more government stimulus to prop up China's economy added fuel to the rally that has pushed the Dalian benchmark up over 20% this year.
Benchmark spot 62% iron ore bound for China climbed to $98.20 a tonne on Wednesday, the highest since August 6, SteelHome consultancy data showed.
Iron-ore's advance, however, "looks increasingly stretched" as the market faces downside risks such as a sharp fall in global steel demand this year and increased shipments from Brazil and Australia when the pandemic eases, ANZ commodity strategists said.