MANILA: Dalian iron ore futures edged up on Wednesday as China’s robust loan growth in the first quarter bolstered hopes for an economic rebound for the world’s biggest steel producer, though traders remained wary of growth and regulatory risks. The most-traded September iron ore on China’s Dalian Commodity Exchange ended morning trade 0.8% higher at 792.50 yuan ($115.06) a tonne.
China’s new bank lending hit an all-time high in the first quarter, while broad credit growth quickened as the central bank kept up policy support for the economy after the lifting of stringent COVID-19 curbs. Overall sentiment, however, remained guarded. On the Singapore Exchange, the steelmaking ingredient’s benchmark May contract was down 1.3% at $118.15 a tonne, as of 0416 GMT.
“How fast could these loans turn into investment activity? This should be clearer if the fixed asset investment grows faster than February’s rate and faster than the pre-COVID growth rate,” said Iris Pang, chief economist at ING Greater China. China’s first-quarter GDP and economic activity data, due on April 18, should provide a clearer picture, she said.
Iron ore prices had climbed on Tuesday on worries that a cyclone heading toward top supplier Australia could disrupt shipments.
Sinosteel Futures analysts, however, said the market seemed to have overreacted to it. Traders were also mindful of regulatory risks as Chinese authorities have repeatedly warned against excessive iron ore price speculation. Dalian coking coal and coke rose 0.4% and 0.6%, respectively.
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