Iron ore futures rally on rapid mill re-stocking

Iron ore futures rallied on Thursday after mills de-stocked faster than expected as inventories dropped. According to some sources, some Chinese mills are working 7-days a week to ramp up production.

The daily consumption of sintering fines among 64 Chinese steelmakers hit a ten-month high of 611.1k tonnes/day during a two-week period between 26 March and 8 April, according to Mysteel.

Furthermore, mills’ appetite for the steelmaking ingredient also improved on recovering profit margins. Medium-grade brands, such as Jimblebar Fines, MAC Fines and Roy Hill Fines, are particularly in strong demand as Chinese mills looked for cost-saving alternatives.

Futures in Singapore rallied strongly during the session, with Apr seen trading at 83.5 after the open when May was 81.4. May then quickly ascended to 82.0, trading as high as 82.2. May traded at 82.0 in several clips. Apr and Jun also traded 84.0 and 80.4 respectively and were a touch softer after the close.