7.7 C
New York
Tuesday, October 4, 2022

Iron ore hits 4-week high as China demand outlook brightens

Iron ore futures touched four-week peaks on Thursday, extending their rally to a fifth session, bolstered by rebounding steel margins in China and hopes of solid economic recovery for the world’s biggest steel producer in the third quarter.

Steel prices also stretched gains, hitting two-week highs in Shanghai following a Financial Times report saying China will help cash-strapped property developers by issuing 1 trillion yuan ($148.3 billion) in loans for stalled projects.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange ended daytime trade 7.2% higher at 793.50 yuan ($117.67) a tonne, after earlier touching its strongest since June 30 at 798.50 yuan.

September iron ore on the Singapore Exchange advanced 6.2% to $119.35 a tonne, also the highest since June 30.

Twelve blast furnaces in China have resumed operations as margins improved, Chinese metals information provider SMM reported, although dozens remained shut for weeks as weak steel demand and low prices had recently squeezed profits.

Iron ore soars on hopes for China’s rebound in Q3

Iron ore and other steelmaking ingredients have now been supported by what analysts at Zhongzhou Futures said a “sharp recovery” of margins, and upbeat Chinese economic data, with industrial output and profits recovering in June.

Dalian coking coal rallied 11% and coke climbed 7.5%.

“The impact of accelerating pro-growth policy measures will drive a solid 3Q economic recovery, suggesting that the operating environment for industrial corporates will likely improve steadily,” J.P. Morgan analysts said in a note.

More such pro-growth policy pledges could be expected from China’s Politburo meeting at the end of this month, where leaders gather to discuss policies for the rest of the year. Rebar on the Shanghai Futures Exchange rose 4.5%, hot-rolled coil advanced 4.3% and stainless steel gained 1.3%.

Analysts, however, warned that risks from COVID-19 curbs and China’s ailing property sector could still spur market volatility.

Iron ore hits 4-week high as China demand outlook brightens

Source: Brecorder

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

11,297FansLike
12,893FollowersFollow
748FollowersFollow
- Advertisement -

Latest Articles

Popular Articles