SINGAPORE: Prices of Dalian iron ore futures spiked on Monday to their highest in more than a week, as a batch of fresh stimulus from China overshadowed concerns about the top consumer’s faltering economic recovery and steel demand.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 3% higher at 788.5 yuan ($110.57) a metric ton.
The contract had earlier risen as much 3.33% to 793.0 yuan.
The benchmark December iron ore on the Singapore Exchange was 2.52% higher at $103.85 a ton, as of 0331 GMT. China’s central bank launched a new lending tool earlier today to inject more liquidity into the market and support credit flow ahead of the expiration of trillions of yuan in loans at the end of 2024.
The People’s Bank of China, which has steadily reduced interest rates and injected liquidity, is under pressure to do more to ensure the economy grows at the government’s target of around 5% this year.
The country’s industrial profits plunged in September, recording this year’s steepest monthly decline, due to factors such as insufficient demand and a sharper decline in producer prices.
However, recent policy measures will “foster a favourable environment for the production and operation of industrial enterprises, supporting the recovery and improvement of their profits”, the National Bureau of Statistics said.
While steel demand from end-users remains lacklustre, prices of major steel products may stabilise and rebound this week on expectations of further stimulus policies from China’s November legislative meeting, Chinese consultancy Mysteel said.
Other steelmaking ingredients on the DCE soared, with coking coal and coke rising 4.21% and 5.11%, respectively. Steel benchmarks on the Shanghai Futures Exchange advanced. Rebar jumped almost 3.2%, hot-rolled coil surged 3.27%, wire rod climbed 2.83% and stainless steel ticked nearly 0.7% higher.
Comments
Comments are closed.