Iron ore futures recovered on Thursday, as Donald Trump winning the U.S. presidential election heightened hopes that top consumer China would unveil stronger stimulus measures to offset any impact from a potentially wider trade war.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.11% higher at 799.5 yuan ($111.56) a metric ton, its highest since Oct. 16.
The benchmark December iron ore contract (SZZFZ4) on the Singapore Exchange rose 1.84% to $105.85 a ton as of 0714 GMT.
Trump’s comeback to the White House sparked concerns over a wider trade war that could hit consumption of metals, with the metals complex recording broad losses on Wednesday.
The president-elect has also threatened to impose a 60% blanket tariff on imports of Chinese goods to boost U.S. manufacturing.
China’s National People’s Congress Standing Committee is meeting over Nov. 4-8, with traders keenly focused on directions from long-awaited fiscal stimulus measures.
China will continue to implement a supportive monetary policy to help promote sustained economic recovery, Pan Gongsheng, governor of the People’s Bank of China, said in remarks published on Thursday.
“If a strong fiscal stimulus policy is implemented, coupled with the realization of the infrastructure rush and replenishment ahead of the year-end, the short-term policy stimulus and marginally improved fundamentals are expected to resonate, supporting prices,” analysts at Jinrui Futures said in a note.
China’s iron ore imports in October climbed 4.48% from a year ago, official data showed, as steelmakers’ margins improved, thanks to Beijing’s massive economic stimulus package spurring more buying.
Other steelmaking ingredients on the DCE gained, with coking coal and coke up 0.75% and 0.23%, respectively.
Steel benchmarks on the Shanghai Futures Exchange ticked higher. Rebar added 1.03%, hot-rolled coil gained 0.7%, wire rod (SWRcv1) edged up 0.27% and stainless steel advanced 0.22%.
Source: Reuters
