BEIJING: Dalian iron ore futures extended gains into a sixth session on Thursday, underpinned by renewed hopes of more policy support from China, following a cabinet meeting on Wednesday and relatively handsome fundamentals for the moment.
Policymakers said China would continue to introduce policies for boosting consumption and promoting investment in a cabinet meeting on Wednesday, following mounting economic woes with a prolonged property crisis, deflationary pressure and slower growth in retail sales and industrial output.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) traded 0.41% higher at 739.5 yuan ($101.09) a metric ton, as of 0215 GMT. In addition, a weakening yuan, the wide difference between spot and futures prices and the remaining high level of hot metal output all provide support to iron ore prices, analysts at Soochow Futures said in note.
The gloomy demand outlook amid the struggling property sector and the looming steel production curbs, however, continued to act as headwinds and limit upside room, analysts said.
The steelmaking ingredient’s benchmark September contract on the Singapore Exchange was 0.11% lower at $100.7 a metric ton, pressured by the hawkish comment from the US Federal Reserve minutes indicating further rate hikes may need to combat inflation.