Iron ore futures rose on Friday (19), ending the week higher, driven by stronger steel demand and inventory replenishment ahead of a Chinese holiday.

The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) rose 0.81% to 807.5 yuan (US$113.54) per ton. The contract ended the week up 0.88%.

September benchmark iron ore on the Singapore Exchange rose 0.27% to US$105.55 per ton, although it fell 0.14% on the week.

Steel demand is strengthening as the peak season begins, and inventory replenishment ahead of China's National Day holiday is providing continued support to the ferrous metals sector.

If demand recovers more strongly than expected between late September and October, steel prices could see further gains, brokerage Galaxy Futures said.

According to data from consultancy Mysteel, Chinese inventories of key carbon steel products fell 0.3% between September 12 and 18 compared to the previous week, to 4.18 million tons.

Average daily production of hot metal, an indicator of iron ore demand, reached 2.41 million tons in the week ending September 19, an increase of 171,900 tons from a year earlier.

Blast furnace capacity utilization increased 6.29 percentage points from a year earlier, to 90.35%, according to data from Chinese financial information website Hexun Futures.

China's top producer's crude iron ore output rose 8.8 percent from a year earlier in August to 81.63 million tonnes, while crude steel production fell for a third month due to weak demand, data from the National Bureau of Statistics showed.

Source: Moneytimes