SINGAPORE: Dalian iron ore futures extended gains for a fourth consecutive session on Friday, driven by optimistic news from state-banks and robust demand.
The most-traded May iron ore on China’s Dalian Commodity Exchange rose 3.1% to 977 yuan ($136.65) per metric ton as of 0320 GMT, and is up 3.6% this week.
On the Singapore Exchange, the benchmark January iron ore was up 1.4% at $137.5 a metric ton, with weekly gains of 2.7%. Five of China’s largest state banks, including the Agricultural Bank of China and China Construction Bank, have cut interest rates on some deposits, according to the banks’ websites.
“China’s industrial metals have reacted positively to this news, as the country aims to reignite consumer spending and stimulate credit growth and borrowing,” said Atilla Widnell, managing director at Navigate Commodities.
“With SGX 62% Iron Ore futures breaking out of resistance at approximately $136 a metric ton, the market is poised to aim for $145-158 a ton in the coming quarter.”
This projection is fuelled by the increase in output from Chinese blast furnaces, as they work to replenish internal iron ore stocks, coupled with the reduction of sea-borne tons due to the seasonal first-quarter mine maintenance programs, Widnell added.
Global crude steel production in November rose 3.3% to 145.5 million tons, World Steel Association data showed on Thursday. China’s steel demand in 2023 will decline by 3.3% from 2022 and contract a further 1.7% in 2024, a state researcher forecast, weighed down by a significant drop in construction activity.
Steel benchmarks on the Shanghai Futures Exchange were mixed. The most-active rebar contract strengthened 1.6%, hot-rolled coil grew 1.7%, and stainless steel gained 0.9%.
Meanwhile, wire rod decreased by 0.4%. Other steelmaking ingredients Dalian coking coal and coke inched up 3.8% and 4% respectively.
Comments
Comments are closed for this article.