Dalian iron ore rises on near-term demand, but higher shipments cap gains

By Michele Pek

SINGAPORE, April 24 (Reuters) - Iron ore futures extended gains for a fourth consecutive session on Thursday, supported by seasonal demand and optimism over U.S.-China trade talks, though a stronger supply outlook from rising shipments limited further upside.

The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 traded 0.28% higher at 724.5 yuan ($99.31) a metric ton, as of 0304 GMT.

The benchmark May iron ore SZZFK5 on the Singapore Exchange was 0.44% lower at $99.8 a ton.

Iron ore traded higher on prospects of improving U.S.-China trade relations, said ANZ.

U.S. Treasury Secretary Scott Bessent said on Wednesday that high tariffs between Washington and Beijing are not sustainable, as President Donald Trump's administration signaled openness to de-escalating a trade war between the world's two largest economies.

Prices also found support from improved demand for the key steelmaking ingredient as steel production gained momentum.

"Improved steel mill profitability saw production recover to 93 million tons in March, keeping Q1 production growth positive," ANZ said.

The daily average steel production of key steel enterprises was 2.113 million tons in mid-April, growing 3.3% month-on-month and logging a 3.1% increase from the same period last year, said consultancy Lange Steel, citing statistics from the China Iron and Steel Industry Association.

On the supply-side, the volume of iron ore shipped to China from Port Hedland, the top iron ore terminal in Western Australia, jumped by a notable 30.3% on month after February's decline, said consultancy Mysteel.

Shipments to China totalled 41.2 million tons in March, according to Mysteel data.

Other steelmaking ingredients on the DCE gained ground, with coking coal DJMcv1 and coke DCJcv1 up 1.05% and 1.66%, respectively.

Steel benchmarks on the Shanghai Futures Exchange traded sideways. Rebar SRBcv1 nudged 0.58% higher, hot-rolled coil SHHCcv1 edged 0.44% higher, while wire rod SWRcv1 was down 0.8% and stainless steel SHSScv1 eased 0.24%.

($1 = 7.2956 Chinese yuan)