Chinese iron ore futures rose on Monday, supported by supply concerns and declining port steelmaking material inventories, while the relaxation of some COVID-19 restrictions at the world's top steelmaker also raised traders' sentiment.
The top-traded September iron ore contract on China's Dalian Commodity Exchange ended morning trading at 812.50 yuan ($119.64) per tonne, up 1.1 percent, and rebounded after posting its biggest weekly loss in nearly three months on Friday.
On the Singapore Stock Exchange, the most active June contract fell 1% to $125.95 per ton.
"Iron ore shipments from Australia and Brazil and weekly arrivals in China should provide a modest boost to fragile sentiment," said Atilla Widnell, managing director of Navigate Commodities in Singapore.
Widnell said that iron ore and other steelmaking inputs are also being boosted, following news that Shanghai will gradually reopen after weeks of quarantines.
Dalian coking coal rose 3.5% and coke rose 2.6%.
Shanghai on Monday laid out plans for a return to a more normal life from June 1 and an end to a painful COVID-19 quarantine that has lasted for more than six weeks and has contributed to a sharp slowdown in China's economic activity.
In Beijing, authorities expanded work-from-home guidance in four districts, but did not impose a citywide curfew.
“Strong blast furnace capacity utilization rates and daily (iron ore) purchases and declining portside inventories should all provide support,” Widnell said.
According to data from SteelHome consultancy, iron ore port inventories in China stood at 141.75 million tons as of May 13, the lowest level since the third week of October.
On the Shanghai Futures Exchange, construction steel and rebar fell 0.2%, while hot rolled coil fell 0.1%. Stainless steel rose 1.8%.
China's crude steel production rose 5.1% month-on-month in April as the impact of environmental restrictions and COVID-19 disruptions eased, but was still well below year-ago levels.
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