The price of %IronOre is marching higher as steel consumption rises in China.
Following a sharp decline over the past two years, new data shows that demand for steel is once again rising across China, the world’s largest consumer of the industrial metal.
Iron ore contracts on the Dalian Commodity Exchange (DCE) closed up 2.26% at 837 yuan ($115.15 U.S.) per metric ton on Feb. 20, its highest level since Oct. 8, 2024.
Iron ore futures contracts traded on the Singapore Exchange increased 1.65% on the day to $108.45 U.S. a ton.
The price increases come amid a surge in the consumption of steel rebar within China, which is used in the construction sector.
Rebar consumption in China, a nation of 1.4 billion people, increased 163% from the previous week to 1.69 million tons as of Feb. 20.
Analysts say steel consumption in China is now exceeding expectations as signs emerge that the Chinese economy is recovering from a prolonged slump that began during the pandemic.
Demand growth in China has renewed optimism that iron ore, the key ingredient in steelmaking, will see steady price growth in coming weeks and months as steel mills boost production.
Other steelmaking ingredients are also seeing their prices rise, with coking coal and coke increasing by 2.89% and 2.62% respectively.
On the Shanghai Futures Exchange, steel benchmarks are also higher, with rebar rising 1.24%, hot-rolled coil adding 1.02%, wire rod edging up 0.26%, and stainless steel gaining 1.15%.
The rise in iron ore prices could also provide some relief to major producers such as miners %RioTinto (NYSE: $RIO) and BHP (NYSE: $BHP), which reported sharp declines in profit in their recent earnings.
China’s economy has slumped in recent years due to a slowdown in consumer spending and a struggling property market coming out of the Covid-19 pandemic.
