BEIJING: Iron ore futures prices pared losses on Tuesday, helped by demand for the key steelmaking ingredient and renewed stimulus hopes in top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) managed to claw back above the psychological level of 800 yuan ($110.16) a metric ton to end daytime trade at 801 yuan a ton. It touched an intraday and 11-week low of 791 yuan a ton earlier in the session. The benchmark July iron ore on the Singapore Exchange erased earlier losses and climbed 1.12% to $103.75 a ton, as of 0734 GMT.
Hopes of more economic stimulus in China resurfaced after Premier Li Qiang said that the country is confident and capable of achieving its full-year growth target of around 5% and vowed to safeguard industrial stability. “Despite the persistent price fall (in iron ore), some traders are still holding confidence in the market amid the remaining high hot metal output as that means at least in the short term, ore demand will be firm,” a North China-based trader said, requesting anonymity as he is not authorised to speak to the media.
Data from consultancy Shanghai Metals Market showed that hot metal output will likely rise again this week. Iron ore prices have fallen for three straight sessions on seasonally weak steel demand, high portside inventories and expectations of a steel output cut.
Other steelmaking ingredients on the DCE were mixed, with coking coal down 0.19% while coke added 0.14%. Most steel benchmarks on the Shanghai Futures Exchange ticked lower. Rebar retreated 0.31%, hot-rolled coil fell 0.32%, wire rod shed 0.4%, while stainless steel advanced 0.36%.
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