Iron ore futures rose on Wednesday, with the Singapore benchmark rebounding after six straight sessions of declines, as hopes re-emerged that China may consider rolling out more impactful stimulus measures to support its flagging economy.
The steelmaking ingredient’s most-active November contract on the Singapore Exchange was up 0.7% at $111.55 per metric ton, as of 0700 GMT,after hitting a six-week low of $109.25 in the previous session.
Iron ore’s most-traded January contract on China’s Dalian Commodity Exchange ended daytime trade 1% higher at 827.50 yuan ($113.39) per ton.
The Singapore reference price has fallen more than 7% from the third-quarter peak of $121.10, with recent losses spurred by concerns about looming steel production cuts in China and uncertainty over the country’s struggling property sector.
Country Garden 2007.HK has warned about its inability to meet offshore debt obligations, potentially joining a growing list of Chinese developers that have defaulted and underscoring a deepening crisis hurting the world’s second-biggest economy and largest steel producer and metals consumer.
“We note China’s deteriorating property sector is potentially a catalyst for more significant stimulus, which we see driving upside to commodity prices vs current levels,” National Australia Bank analysts said in a note.
China’s highest court has issued guidelines to improve the legal environment for private business, according to a report, suggesting renewed efforts by policymakers to support a key growth driver.
China meanwhile is looking to increase its budget deficit for 2023 as the government prepares to bring a new round of stimulus to help the economy meet its annual growth target, Bloomberg News reported on Tuesday, citing people familiar with the matter.
Steel benchmarks in Shanghai were subdued though, with rebar SRBcv1 down 0.2%, while hot-rolled coil SHHCcv1 dipped 0.3%and stainless steel SHSScv1 shed 0.1%.
Coking coal DJMcv1 and coke DCJcv1 on the Dalian exchange slumped 4.3% and 2.5%, respectively.
Source: Hellenic Shipping News
