SINGAPORE: Dalian iron ore futures prices snapped a three-day losing streak on Thursday, buoyed by top producer Rio Tinto’s optimistic demand outlook for top consumer China and continued hopes of more stimulus in the Asian country.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.63% higher at 778 yuan ($107.60) a metric ton as of 0250 GMT. The benchmark September iron ore on the Singapore Exchange was 0.62% higher at $101.55 a ton. Rio Tinto, the world’s largest iron ore producer, reported higher first-half underlying earnings on Wednesday and its upbeat comments on China boosted iron ore contracts, ANZ analysts said in a note. The firm sees the Chinese economy growing “plus or minus 5%”, which should support solid commodities’ demand, Rio’s CEO Jakob Stausholm said.
Stausholm cited the “enormous” impact of China’s green transition on steel demand, which he also expects to feed into higher consumption of high-grade iron ore. Weaker-than-expected Chinese economic data — manufacturing activity in July shrank for a third month, while non-manufacturing activity expanded more slowly — also added to hopes for further government stimulus, said Westpac analysts. Chinese leaders signalled on Tuesday the stimulus measures needed to reach this year’s economic growth target will be directed at consumers, stressing the necessity of boosting consumption to expand domestic demand.
Other steelmaking ingredients on the DCE fell, with coking coal and coke down 1.31% and 1.69%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were higher. Rebar climbed 0.75%, hot-rolled coil added about 0.7%, stainless steel advanced nearly 0.9%, and wire rod inched up 0.15%.
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