By Enrico Dela Cruz

(Reuters) – Chinese iron ore futures increased on Monday due to supply worries and decreasing portside inventories. Trader sentiment was also supported by the easing COVID-19 restrictions in the top steel producer world.

After posting its largest weekly loss of nearly three months, the most traded September iron ore contract was 1.1% more at 812.50 Yuan ($119.64 a tonne) in morning trading.

The Singapore Exchange (OTC): However, the active June contract dropped by 1% to $125.95 per tonne.

Atilla Widnell (Managing Director at Navigate Commodities Singapore) stated that “Falling Australian iron ore shipment and arrivals to China week-on–week should provide modest support in fragile sentiment.”

Widnell stated that iron ore, as well as other inputs for steelmaking were supported by reports that Shanghai would gradually open its doors to the public after weeks of lockdowns.

Dalian coal coke rose 2.6%, while coking coal in Dalian increased by 3.5%

Shanghai laid out Monday plans for a more normal lifestyle starting June 1, and ending the painful COVID-19 lockdown, which lasted over six weeks and caused a severe slowdown in China’s economic activity.

Beijing authorities gave guidance in Beijing to allow people to work remotely from their homes, however, they have not enforced citywide lockdowns.

Widnell explained that “robust blast furnace utilization rates, daily (ironore) offtakes as well as depleting portside stocks should all support”

According to SteelHome consultancy data, China’s iron ore port inventory was at 141.75 Million tonnes as of May 13. This is the lowest level since October 3rd.

On the Shanghai Futures Exchange, construction steel rebar fell 0.2% and hot-rolled coil dropped 0.1%. The price of stainless steel rose 1.8%

China’s crude iron production rose 5.1% in April as environmental restrictions eased and COVID-19 disruptions were lessened, though it still remained well below the year-ago level.