BEIJING: Dalian and Singapore iron ore futures ticked higher on Tuesday, boosted by heightened expectations of more supportive measures from China following weaker-than-expected economic data.
The most-traded September iron ore on the Dalian Commodity Exchange (DCE) ended daytime trading 0.66% higher at 845 yuan ($117.83) a metric ton, after losses on Monday.
The benchmark August iron ore on the Singapore Exchange gained 0.98% to $113.60 a metric ton, as of 0657 GMT. Gross domestic product (GDP) in the world’s second-largest economy grew by 6.3% in the second quarter on an annual basis, well below the growth forecast of 7.3%, data from the National Bureau of Statistics showed on Monday. The property sector, the largest steel consumer in China, remained firmly in a downtrend during the quarter.
“The latest data printing is increasing calls for more stimulus for the Chinese economy,” analysts at the National Australia Bank said in a note. Expectations grew that more forceful stimulus measures will be announced in the politburo meeting by the end of this month to shore up the flagging post-pandemic economic recovery, said analysts.
This came after China’s top economic planner pledged on Tuesday that it would roll out policies to “restore and expand” consumption without delay as consumers’ purchasing power remained weak, suggesting an urgency to revive the domestic demand. Other steelmaking ingredients coking coal and coke on the DCE jumped 4.65% and 2.51%, respectively, after sentiment was lifted by near-term concerns over reduced supply.
“There are expectations of temporary tightening supply in coal following the recently intensified safety checks, which has spurred the evident increase in prices today,” said Cheng Peng, a Beijing-based analyst at Sinosteel Futures.
Sentiment was also boosted as some steel mills in north China’s Tianjin and Xingtai accepted the second round of coke price rise of 50 yuan per metric ton, which is expected to expand in more regions, consultancy Mysteel said in a note late Monday.
Steel benchmarks on the Shanghai Futures Exchange broadly gained. Rebar advanced 0.62%, hot-rolled coil climbed 0.73%, wire rod grew 0.12% and stainless steel added 0.74%.