BEIJING: Dalian and Singapore iron ore futures rose on Monday, with investor sentiment buoyed by signs of improvement in downstream demand and expectations of a raft of stimulus policies to be rolled out in the world’s second-largest economy.
Apparent demand for the five major steel products - rebar, wire rod, hot-rolled coil, cold-rolled coil, and medium plate - posted a week-on-week rise of 9% to 10.08 million tonnes in the week as of May 11, according to Reuters calculation based on data from consultancy Mysteel.
The most-traded September iron ore on the Dalian Commodity Exchange (DCE) climbed 2.01% to 710 yuan ($102.72) a tonne, as of 0300 GMT, after falling 1.3% last week.
The benchmark June iron ore on the Singapore Exchange rose 1.01% to $100.45 a tonne, as of 0307 GMT, having fallen 5.7% last week. “The rise is partly benefiting from the market expectation that (Chinese) government may roll out some stimulus policies to boost the economy after the weaker-than-expected economic data last week,” said Chen Peng, a Beijing-based steel raw materials analyst at Sinosteel Futures.
New Chinese bank loans tumbled far more sharply than expected in April, less than a fifth of March’s tally and just over half of the amount expected by analysts, data from the People’s Bank of China (PBOC) showed on Thursday.
“We have not seen any material improvement in the (iron ore) fundamentals, though,” Chen added. An increase in crude steel output, following production resumption at some mills, also lent support to the market, according to analysts.
China’s daily crude steel output is estimated at 2.91 million tonnes in the first ten days of May, posing a rise of 1.18% from the previous ten-day level, data from the China Iron and Steel Association showed. The other steelmaking ingredients-coking coal gained 1.38% and coke climbed 1.71%.
Rebar on the Shanghai Futures Exchange rose 1.03% to 3,632 yuan a tonne, hot-rolled coil advanced 1.34%, and wire rod was 2.24% higher. Stainless steel edged down 0.07%.