Iron ore futures on the Dalian and Singapore exchanges rose on Tuesday as prospects of further economic stimulus in China and active post-holiday restocking at some plants boosted traders’ spirits.
China will implement more effective support measures to expand domestic demand, Premier Li Qiang told delegates at the World Economic Forum summit in Tianjin.
This statement comes after China’s National Development and Reform Commission held a meeting on Monday where it urged financial institutions to expand the issuance of medium- and long-term loans to manufacturing industry, to some extent lifting the sentiment, according to analysts.
The market expects a number of support measures to be announced at the Politburo meeting in late July to stimulate China’s post-pandemic economic recovery.
Many steel mills returned to the port market on Monday to purchase iron ore to meet production needs, with daily transaction volumes rising 126% to 961,000 tonnes on a daily basis, according to data from consultancy Mysteel.
September’s top-traded iron ore on the Dalian Commodity Exchange (DCE) finished daytime trading up 4.11% at 824 yuan ($114.24) a ton, the highest since March 16.
Benchmark July iron ore on the Singapore Stock Exchange rose 3.52% to $112.9 a ton, the highest since June 20.
Huatai Futures analysts said in a statement that the remaining high level of pig iron production, coupled with insufficient supply of scrap steel, provided relatively strong support for iron ore consumption.
Source: Terra
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