BEIJING: Iron ore futures prices rose on Monday, helped by better-than-expected factory data in top consumer China and hopes of more stimulus measures in the world’s second-largest economy later this month.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.2% higher at 829 yuan ($114.06) a metric ton, as of 0304 GMT.
The benchmark August iron ore on the Singapore Exchange was nearly 0.6% higher at $107.2 a ton.
The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 51.8 in June from 51.7 in the previous month, marking the fastest clip since May 2021 and surpassing analysts’ forecasts of 51.2.
The official manufacturing PMI was unchanged from May at 49.5 in June, data showed on Sunday, below the 50-mark separating growth from contraction and in line with a median forecast of 49.5 in a Reuters poll.
Iron ore logs weekly gain on resilient China demand
The expectation that hot metal output will fall significantly receded after the latest property stimulus in Beijing, analysts at Jinrui Futures said in a note.
China’s capital city Beijing unveiled last week measures to reduce the cost of buying a home by cutting mortgage interest rates and the minimum down payment ratio.
Additionally, some investors and traders are bearing hopes for possibly more stimulus from the long-delayed third plenum to be held from July 15 to July 18.
Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.9% and 2.4%, respectively.
Steel benchmarks on the Shanghai Futures Exchange posted marginal gains. Rebar ticked 0.3% higher, hot-rolled coil advanced 0.4%, wire rod edged up 0.1% and stainless steel added 0.5%.
“The room for a further fall in steel prices in the second half of the year is limited as the valuation has already stayed at a relatively low level and many mills are suffering loss,” Everbright Futures said in a note.
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