Iron ore rises further on US-China trade deal hopes, profit-taking curbs gains
BEIJING, Oct 30 (Reuters) - Iron ore futures rose for a fourth straight session on Thursday, buoyed by hopes of a trade deal between the world's two largest economies, although gains were capped by a bout of profit-taking on price reversal fears.
U.S. President Donald Trump and China's leader Xi Jinping were set to hold talks in South Korea on Thursday morning, seeking a return to a fragile trade war truce between the two superpowers.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 was up 0.81% at 806 yuan ($113.15) a metric ton, as of 0200 GMT, after hitting a two-week high of 808 yuan earlier in the session.
The benchmark December iron ore SZZFZ5 on the Singapore Exchange was little changed at $107.2 a ton after touching its highest since October 14 at $107.5.
Expectations of an accelerated pickup in portside inventories also put pressure on prices, said Steven Yu, a senior analyst at consultancy Mysteel.
"The price rally, mainly benefiting from improved macro sentiment, has already beat expectations, while thinning spot trading failed to inject similar-scale momentum to spot prices, so it's not surprising to see futures prices consolidate after hitting a recent peak," Yu said.
While cheering the macro-related boost, investors were cautious of signs of a seasonal slowdown in steel demand.
China's factory activity likely shrank for a seventh month in October, as producers' efforts to offload goods abroad merely exported the price wars weighing on them at home.
"Some investors booked profits on concerns over a price reversal following a consecutive rally," said a Zhejiang-based trader on condition of anonymity as he is not authorised to speak to media.
Coking coal DJMcv1 and coke DCJcv1, other steelmaking ingredients, gathered further steam on expectations of constrained supply, up 2.29% and 1.07%, respectively.
Steel benchmarks on the Shanghai Futures Exchange advanced. Rebar SRBcv1 edged up 0.35%, hot-rolled coil SHHCcv1 rose 0.24%, wire rod SWRcv1 ticked up 0.12% and stainless steel SHSScv1 nudged up 0.04%.
($1 = 7.1230 Chinese yuan)
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