MANILA: Iron ore futures rose on Tuesday, with the Singapore benchmark hitting a five-month peak, buoyed by a raft of measures from top steel producer China to rejuvenate its faltering economy and struggling property sector.
The most-traded October iron ore on the Singapore Exchange climbed as much as 2% to hit $117 per metric ton, the contract’s strongest level since early-April.
The steelmaking ingredient’s most-active January contract on China’s Dalian Commodity Exchange ended morning trade 1.2% firmer at 861.50 yuan ($118.18) per ton, just below a contract high of 865.50 yuan hit on Monday.
“The introduction and implementation of economic stimulus policies are worth looking forward to,” Huatai Futures analysts said in a note. Beijing has released a series of measures to revive slowing growth, with the central bank and top financial regulator last week easing some borrowing rules to aid homebuyers.
Investors, however, were urged to restrain themselves and be mindful of the anticipated steel production curbs in China this year. “The focus remains on steel production cuts, which will commence later this year, with the only question being when,” Westpac analysts said in a note.
China will continue to cap steel output this year, according to the general manager of state-owned Baosteel, confirming the continuation of a two-year-old zero-growth policy designed to limit the industry’s carbon emissions. China’s crude steel output in January-July was up 2.5% versus the same period last year. Steel benchmarks in Shanghai were subdued. Rebar slipped 0.1%, hot-rolled coil gained 0.2%, wire rod dipped 0.3%, and stainless steel lost 1%. Other steelmaking ingredients on the Dalian exchange were firmer, with coking coal rising 4.8% in its fifth straight session of gains amid strong demand and concerns of tight supply following recent mine safety checks in China. Coke climbed 2.2%.
On Monday, Japanese rubber futures rose to their highest in 11 months as Beijing’s measures to revive the country’s economy underpinned the market.
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