Ferrous futures in China rebounded on March 10, led by a 4% jump in iron ore as declining stockpiles of the steelmaking raw material at the country's ports re-ignited supply concerns in the world's top steel producer.
Iron ore's rebound also followed news about a further erosion of a Vale SA mine in major supplier Brazil, which sparked worry about the mine's stability and its impact on a nearby tailings dam.
The Dalian Commodity Exchange's most-traded May iron ore contract gained as much as 4% to 657 yuan/t ($94.67/t), recouping March 9's loss. Futures on the Singapore Exchange rose as much as 2.3%.
The steelmaking raw material was among the big losers on March 10 when panic over the spread of the coronavirus outside China and plunging oil prices gripped financial markets.
Iron ore imports stocked at China's ports dropped to 126.25 million tonnes, as of March 6, down 3.4% this year.
"Inventory is still at a low level (and) it has strong support for the price of iron ore," analysts at Sino-Steel Futures Co., Ltd. in Beijing said in a note.
The drop in port stockpiles mainly reflects steady demand, analysts said, as restocking by steel mills continued and business activities pick up steam in China after being disrupted by the epidemic.
"As construction restarts ramp up, we are likely going to see more than 80% (of) major infrastructure projects in full swing by end of March," Singapore-based steel and iron ore data analytics company Tivlon Technologies wrote in a note.
(Writing by Emma Yang Editing by Tammy Yang)
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