FX.co ★ Iron Ore Set for Second Weekly Gain

Iron ore futures rose toward CNY 730 per ton and were set for a second straight weekly gain, driven by elevated ocean freight rates and expectations of pre-holiday restocking in top buyer China. Adverse weather conditions in the Pacific, higher oil prices, and increased transshipment volumes from Guinea have all contributed to higher shipping costs, in turn lending support to iron ore prices. Industry data also showed that iron ore inventories at major Chinese ports fell again last week, marking a fourth consecutive weekly decline and indicating scope for renewed restocking. Elsewhere, Brazilian miner Usiminas temporarily halted operations at its Samambaia iron ore plant in Itatiaiuçu as of September 2, citing weaker ore prices alongside sharply higher freight costs. Even so, upside for iron ore may be capped as profit margins at Chinese steel mills continue to narrow.