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PrintReuters reported that steel and iron ore futures in China began November higher with iron ore climbing as much as 3.4% as strong data from the top consumer brightened the outlook for demand.
China's Purchasing Managers' Index rose to 51.4 in October from 51.1 in September, topping market expectations and marking the highest since April 2012, according to the country's National Bureau of Statistics. A separate reading by HSBC put the PMI at 50.9, a seven-month high and matching an initial estimate.
The data may revive optimism that growth in the world's No. 2 economy remains on track heading into the Q4 despite weaker factory and trade data earlier, boding well for demand for steel and its raw material iron ore.
The most traded rebar contract for May delivery on the Shanghai Futures Exchange touched a session high of CNY 3,681 per tonne its loftiest since October 16. It closed up almost 1% at CNY 3,671.
Rebar, used in construction, gained 1.7% for the week, its biggest such climb since mid August. The PMI number shows that there may be some acceleration in the overall economy. There should be some demand support for steel."
Ms Helen Lau senior mining analyst at UOB Kay Hian Securities in Hong Kong, who sees rebar potentially gaining by CNY 150 over the next two months. Rebar prices fell for a second straight month in October as consumption during a typically brisk construction season turned out to be lean.
At the Dalian Commodity Exchange, the most active May iron ore contract rose as much as 3.4 percent to CNY 954 per tonne before closing at CNY 942 up 2.1%t. It gained 1.6% on the week.
Volume for the most traded contract reached 321,242 lots, exceeding the 300,818 lots that changed hands when Dalian launched the futures on October 18. Friday's volume is equivalent to just above 16 million tonnes.
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