BEIJING: Dalian iron ore futures rallied to a three-week high on Tuesday, supported by the Chinese central bank’s promise to provide money-market liquidity, before giving up some of the gains after weaker-than-expected economic data.
China’s central bank said on Monday it would keep liquidity reasonably ample and interest rates reasonable and appropriate to support domestic demand.
The statement by the People’s Bank of China bolstered market sentiment and underpinned prices in early trading, analysts said. However, a flurry of economic data took the edge off the sentiment, showing a slide in the property sector was picking up pace.
Other indicators, including industrial output and retail sales, undershot expectations.
Investment in the property sector, the largest steel consumer in China, tumbled 16.2% year-on-year in April after a 7.2% drop in March, Reuters’ calculations based on official data showed. Investment for January-to-April fell 6.2% on the year, compared to a 5.8% decline in the first three months, the official data showed.
The most-traded September iron ore futures contract on the Dalian Commodity Exchange (DCE) ended morning trade 1.19% higher at 724 yuan a tonne, after reaching a three-week high of 733.5 yuan a tonne earlier in the session.
The benchmark June iron ore contract on the Singapore Exchange was 0.65% lower at $104.35 a tonne, as of 0453 GMT, after hitting a one-week high at $105.03 a tonne on Monday.
Other steelmaking ingredients similarly narrowed gains with coking coal climbing 0.76% and coke rising 0.8%. Rebar on the Shanghai Futures Exchange edged down 0.05% to 3,650 yuan a tonne, hot-rolled coil was flat, wire rod shed 1.25% and stainless steel fell 2.96%. “Some mills planned to restart operations amid improved margins, and this will put downward pressure on steel prices given that the market is approaching an off-demand season,” analysts at Haitong Futures said in a note.
China churned out 354.39 million tonnes of crude steel in January to April, the highest for the period since 2021 and up 4.1% from the same year-earlier period, the official data showed.
Comments
Comments are closed for this article.