Iron ore rallies to multi-month high on China’s pledge of easing monetary policy

SINGAPORE: Iron ore futures rallied on Wednesday to their highest in multiple months, boosted by hopes of improving demand in top consumer China following Beijing’s pledge of easing monetary policy this year.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) closed morning trade 3.52% higher at 823.5 yuan ($117.90) a metric ton, its highest level since July 23.

The benchmark February iron ore on the Singapore Exchange was 1.67% higher at $108.25 a ton as of 0322 GMT, after touching its highest since February 24 at $108.6 earlier.

China’s central bank said on Tuesday that it would cut the reserve requirement ratio and interest rates in 2026 to keep liquidity ample, and continue to implement appropriately loose monetary policy.

Hopes of rate cuts by Beijing in coming months boosted broad sentiment in the ferrous market, underpinning price rallies across the market, said analysts.

Supporting prices of the key steelmaking ingredient was also the expectation of a raft of restocking by Chinese steel mills with low in-plant inventory ahead of the Lunar New Year in February.

Other steelmaking ingredients on the DCE likewise surged, with coking coal and coke up 7.98% and 6.85%, respectively.

Steel benchmarks on the Shanghai Futures Exchange gained ground.

Rebar rose 2.26%, hot-rolled coil strengthened 1.94%, wire rod firmed 1.12% and stainless steel jumped 4.39%.