Iron ore futures rallied to their highest in more than a week on Monday, as revived hopes of more stimulus from top consumer China boosted sentiment.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! surrendered some earlier gains to end daytime trade 1.92% higher at 768.5 yuan ($104.82) a metric ton.
It hit the highest level since Jan. 3 at 772.5 yuan a ton earlier in the session.
The benchmark February iron ore (SZZFG5) on the Singapore Exchange gained 1.75% to $98.85 a ton as of 0700 GMT after touching $100.25, the highest since Jan. 3, earlier in the day.
China’s central bank chief on Monday said the government will support moderately loose monetary policy to maintain ample liquidity, lifting broad investor sentiment.
This came after Reuters reported last Friday that China’s central bank will likely deploy its most aggressive monetary tactics in a decade this year in an attempt to stimulate the economy and soften the blow of impending U.S. tariff hikes.
Pei Hao, a senior analyst at international brokerage Freight Investor Services (FIS), ascribed the ore price rise to the resonance of commodities caused by the oil price rally after the latest sanctions on Russian oil.
“In the medium term, both the upside and downside room for ore prices will be limited given that consumers have locked prices and demand.”
Prices of steel and steelmaking ingredients posted losses so far this month, as demand seasonally slowed and as steelmakers and steel consumers have nearly completed replenishment for steelmaking feedstocks and steel products to meet production needs during and after the Chinese New Year holidays, analysts said.
The Chinese New Year begins from Jan. 28.
China’s iron ore imports in 2024 rose to a record high for a second year, as lower prices spurred buying while demand remained resilient due in large part to massive steel exports that are inflaming trade tensions.
Other steelmaking ingredients on the DCE gained, with coking coal NYMEX:ACT1! and coke (DCJcv1) up 2.61% and 2.28%, respectively.
Steel benchmarks on the Shanghai Futures Exchange advanced. Rebar RBF1! added 1.44%, hot-rolled coil EHR1! rose 1.45%, wire rod (SWRcv1) climbed 1.14% and stainless steel HRC1! ticked up 0.8%.
Source: Reuters
