Iron ore spot markets rallied for a fourth consecutive session on Friday, closing at a fresh four-month high.
According to Metal Bulletin, the price for benchmark 62% fines rose 0.3% to $76.80 a tonne, leaving its gain for the week at 5.8%.
It now sits at the highest level since September 6, 2017.
The gains in the benchmark were overshadowed by those in higher and lower grade ores.
The price for 58% fines rose 0.9% to $42.32 a tonne while ore with 65% Fe content added 1%, closing at $92.60 a tonne.
The strength in iron ore came despite modest declines in Chinese spot and futures prices during the session.
According to Thomson Reuters, citing data from Mysteel, spot steel prices fell 0.8% on Friday to 4,437.83 yuan a tonne. Rebar futures in Shanghai also slipped, falling 0.3% to 3,798 yuan a tonne.
Analysts put the weakness down to stifled demand due to freezing weather conditions in northern Chinese provinces.
“The steel market is currently at a low season, as construction sites in the northern part of country halt for cold weather,” Bai Jing, steel analyst at Galaxy Futures, told Reuters.
“Traders are losing interest in stocking steel products at the moment.”
Rebar inventories held by traders increased for a second consecutive week last week, according to data from Steelhome Consultancy, lifting to 2.973 million tonnes, slightly up from the record low levels struck in late 2017.
Iron ore port inventories also increased over the same period, lifting by 1.87 million tonnes to 148 million tonnes, the highest level since records began in 2012.
Providing few clues as to what direction spot markets will move on Monday, Chinese commodity futures were largely unchanged in overnight trade on Friday.
SHFE Rebar ¥3,792 , 0.03%
DCE Iron Ore ¥540.50 , 0.19%
DCE Coking Coal ¥1,357.50 , 0.52%
DCE Coke ¥2,062.50 , -0.34%
Rebar futures slipped marginally while iron ore futures in Dalian finished at 540.5 yuan, up fractionally from Friday’s day session close of 538.5 yuan.
Trade in Chinese commodity futures will resume at midday AEDT.