Iron ore rebounds from two — year low on dip buying, improving steel margins

Oct 16 (Reuters) — Iron ore prices rebounded on Friday after touching more than two-year lows the day before, aided by a raft of dip buying amid signs of improving steel margins and downstream consumption in top consumer China. The most-traded iron ore contract on China's Dalian Commodity Exchange rose 0.22% to 673.5 yuan ($100.65) a metric ton, as of 0157 GMT, losing 1.3% so far this week. The benchmark November iron ore on the Singapore Exchange was 0.56% higher at $90.35 a ton, as of 0147 GMT. It has dropped 0.3% so far this week. Market sentiment was boosted by slightly improved profitability among steel mills, propelling a flurry of dip buying that led to a temporary "technical rebound", said analysts. Around 8% of domestic steelmakers were operating at a profit as of October 15, versus 6.9% the week before, data from consultancy Mysteel showed. The fall in hot metal output, a gauge of iron ore demand, slowed down, indicating that mills will need to restock feedstocks, analysts at broker First Futures said in a note. But downside risks persisted as portside inventories built up and the demand outlook was vulnerable to remaining low profitability and a slack season ahead. Cokin