Iron ore futures on the Dalian and Singapore exchanges extended Monday’s gains to a three-week high on traders relief that steelmakers in China’s main producing province have yet to implement output cuts and with the latest government monetary stimulus.
January’s top-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) finished the day’s trade up 0.91% at 777 yuan ($106.35) a ton, the highest since July 26.
Benchmark September iron ore on Singapore Stock Exchange rose 0.56% to $107.45 a ton, the highest level since July 31.
China cut its key one-year rate on Monday, as expected, but surprised markets by keeping its five-year rate unchanged, which affects mortgage prices.
In a Reuters poll of 35 market analysts, all participants expected reductions in both rates.
The central bank’s decision came after China said it would coordinate financial support to resolve local government debt woes as part of efforts to shore up an increasingly shaky economic recovery and reassure worried investors.
Iron ore consumption remains resilient despite high levels of pig iron production, although steelmakers are cautious on purchasing volumes, analysts at Huatai Futures said in a note.
“The market was buoyed by reports that Chinese steelmakers were not cutting output as feared,” ANZ analysts said in a statement.
“Although steel fundamentals improved from the previous week, they are still under pressure due to the overall weak macroeconomic backdrop coupled with sluggish seasonal demand,” analysts at Sinosteel Futures said in a note.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
