Iron ore futures prices rose on Friday but posted a weekly loss as investors weighed the prospect of further monetary stimulus from China against a weak local economic recovery, while global iron ore supplies also tightened.
The January contract for the most traded iron ore on China’s Dalian Commodity Exchange (DCE) closed the day up 0.15% at 680 yuan ($96.43) a tonne. The contract was down 3.41% for the week.
Singapore Exchange’s October benchmark iron ore fell 0.99% to $91.75 a tonne.
In an unexpected move, China kept its benchmark lending rates at their monthly level, confounding market expectations that were ripe for a change after the Federal Reserve cut interest rates disproportionately early this week.
However, market analysts widely believe that Chinese policymakers will implement more stimulus to prop up the struggling economy and help it meet its increasingly challenging 2024 growth target, following a series of negatively surprising economic data in August.
Meanwhile, imported iron ore stockpiles at 45 major Chinese ports fell 0.5 percent between Sept. 13 and Sept. 19, Chinese consultancy Mysteel said, adding that sales of the commodity rose on Sept. 19.
Production enthusiasm among China’s blast furnace producers continued to grow this week as domestic steel prices rose, allowing more mills to recover from large losses, Mysteel added.
Although steel mills are expected to resume production, the pace of recovery may slow as overseas supply shows a recent recovery, leaving little room for substantial gains as the surplus structure in the market remains unchanged, Chinese financial information site Hexun Futures said.
Source: Terra
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