SINGAPORE: Dalian iron ore futures inched up slightly on Tuesday, while Singapore iron ore futures fell as the market responded cautiously to China’s latest policy guidelines, with traders seeking more substantial measures before taking further action.
The most-traded September iron ore on China’s Dalian Commodity Exchange rose 1.1% to 839.5 yuan ($117.13) per metric ton as of 0330 GMT, after settling at 830.5 yuan the previous day.
On the Singapore Exchange, the benchmark September iron ore was down 0.5% at $106.8 a metric ton, paring gains from the prior session. Chinese authorities released additional policy guidelines on Monday but no concrete measures to boost the faltering economy and domestic consumption, leaving investors wanting as dull activity data heightened pressure for officials to act.
Over the weekend, China’s biggest cities, including Beijing and Shenzhen, said they would implement measures to better meet the needs of homebuyers, without giving details, aiming to prop up the property sector that is seeing few signs of recovery.
“China needs a stimulus bazooka, but it’s firing a scattergun. The glass half-full view of the stimulus measures announced by China’s State Council on Monday is that they are proof that the government recognises the need to offer its spluttering economy broad support,” National Australia Bank said in a note.
China’s manufacturing activity fell for a fourth straight month in July, albeit at a slower pace, an official factory survey showed on Monday, reinforcing the need for further policy support to boost domestic demand.
Steel benchmarks on the Shanghai Futures Exchange strengthened. The most-active rebar contract rose 0.3%, hot-rolled coil inched up 0.1%, wire rod climbed 0.3%, and stainless steel was up 0.5%. Other steelmaking ingredients Dalian coking coal and coke jumped 2.4% and 2.8%, respectively.
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