BEIJING: Iron ore pushed higher on Thursday on expectations of further monetary easing measures in top steel producer China, while stainless steel futures jumped to a three-month peak, buoyed by record-high prices of key ingredient nickel.
Iron ore’s most-traded May contract on China’s Dalian Commodity Exchange ended daytime trading 1.3% higher at 742 yuan ($116.97) a tonne, after touching a one-week high of 747.50 a tonne earlier in the session.
The steelmaking ingredient’s most-active March contract on the Singapore Exchange climbed 2.6% to $133.90 a tonne by 0708 GMT.
China stepped up its monetary easing efforts to prop up a slowing economy this week by lowering a set of key policy rates and lending benchmarks, with markets expecting further moves.
“We view this week’s rate cuts as a pre-emptive move to drive a growth rebound in 2022,” said Commonwealth Bank of Australia commodity analyst Vivek Dhar, citing downside pressures from the reimposition of COVID-19 curbs and the property sector’s downturn.
Apart from China’s stimulus measures, Dhar said improved steel margins also supported iron ore prices.
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“The fact that steel margins rose from November to December also suggests that steel demand has held up reasonably well - potentially indicating that steel demand from China’s infrastructure sector may be offsetting demand weakness from China’s property sector,” Dhar said.
Stainless steel on the Shanghai Futures Exchange surged by its daily upside limit of 8% to hit its highest since late October, as supply worries and strong demand propelled Shanghai nickel to a record peak.
Shanghai rebars rose 0.3%, while hot-rolled coil was nearly flat.
Dalian coking coal gained 0.4% and coke advanced 0.6%.