BEIJING: Iron ore futures prices rebounded on Thursday amid mounting speculation that top consumer China will announce more stimulus in its third plenum after disappointing June inflation data.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) recouped early losses to trade 0.43% higher at 825 yuan ($113.45) a metric ton, as of 0221 GMT.
The benchmark August iron ore on the Singapore Exchange rose 2.1% to $107.5 a ton. China’s consumer prices grew for a fifth month in June but missed expectations, while producer price deflation persisted, with domestic demand mired on a slow recovery track despite support measures for the world’s second-largest economy.
A barrage of disappointing data in the second quarter has raised hopes that Beijing will unveil more economic stimulus in its third plenum over July 15-18, focusing on policies on further deepening reforms and promoting the modernisation of China.
Despite a rebound driven by stimulus bets, prices of the key steelmaking ingredient are still under pressure from weak fundamentals, said analysts. The headwinds that iron ore is currently facing include widening losses among steelmakers, a further rise in steel inventories and signs of hot metal output falling, analysts at Jinrui Futures said in a note.
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