SINGAPORE: Iron ore futures jumped on Thursday on upbeat China economic data, while lean domestic crude steel production spurred hopes of lifting globally suppressed steel prices and improving Chinese steel mill margins.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 3.1 percent higher at 782.5 yuan (USD114.79) a metric ton.
The benchmark May iron ore on the Singapore Exchange was 1.86 percent higher at USD106.15 a ton, as of 0708 GMT.
The Trump administration expressed optimism on Wednesday about reaching a deal to end the war with Iran, while also warning of increasing economic pressure against Tehran if it remains defiant.
Hopes of an end to the Iran war spurred positive sentiment for metals markets on Thursday.
Meanwhile, China’s economy grew 5 percent in the first quarter from a year earlier, official data showed on Thursday, beating analysts’ expectations as policymakers brace for the fallout from the Iran war.
In addition, China’s crude steel output slid 6.3 percent in March year-on-year to its lowest level for the month since 2020 as margins thinned and exports declined amid the Middle East conflict.
The world’s largest steel producer manufactured 87.04 million metric tons of crude steel last month, the National Bureau of Statistics (NBS) said on Thursday.
Lower Chinese steel production could lift steel prices globally, as China’s large export volumes have historically suppressed steel prices, which make it harder for steel mills to profit.
The country had pledged in March to curb overcapacity in its steel sector.
Other steelmaking ingredients on the DCE gained, with coking coal and coke up 2.32 percent and 1.94 percent, respectively.
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