BEIJING: Dalian and Singapore iron ore futures hit the highest in more than a week on Thursday, as investor sentiment improved on the prospects of Beijing rolling out stimulus policies to revive the economy, better-than-expected factory activity data and supply disruption worries.
The weak manufacturing data has raised expectations of policy support for the industry, analysts at investment bank ANZ said in a morning note.
The official manufacturing purchasing managers’ index (PMI) released on Wednesday fell to a five-month low of 48.8, contributing to the broad weakness in the ferrous metals market that day.
Howver, the Caixin/S&P global PMI rose to 50.9 in May from 49.5 in April, above the 50-point index mark that separates growth from contraction, data showed on Thursday. The reading surpassed expectations of 49.5 in a Reuters poll.
Lifting the iron ore market is also a concern over possible supply disruptions, though some analysts played down the influence. South Africa’s freight logistics group Transnet has suspended operations on its main iron ore railway line due to cable theft, it said in a statement on Wednesday.
The most-traded September iron ore on the Dalian Commodity Exchange (DCE) was 3.56% higher at 727.5 yuan ($105.25) a tonne, as of 0215 GMT, the highest since May 22. The benchmark June iron ore on the Singapore Exchange was 1.7% higher at $102.95 a tonne, as of 0220 GMT, the highest since May 19.
“We do not think it will have a big impact on the market, as the temporary suspension on transportation will likely merely affect the shipment pace, without reducing overall shipment volumes much,” said Cheng Peng, a Beijing-based analyst at Sinosteel Futures.
The other steelmaking ingredients - coking coal and coke climbed 2.51% and 1.42%, respectively. Higher raw materials prices supported steel prices as well. Rebar on the Shanghai Futures Exchange rose 2.15% to 3,522 yuan a tonne, hot-rolled coil grew 2%, wire rod gained 1.62% and stainless steel moved up 1.53%.
Comments
Comments are closed for this article.