SINGAPORE: Dalian iron ore futures prices climbed on Friday after a three-session slide and were on track for a weekly gain, as a raft of recent stimulus measures from top consumer China lifted market sentiment.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 3.07% higher at 771.5 yuan ($108.28) a metric ton, rising 1.71% so far this week.
The benchmark November iron ore on the Singapore Exchange rose 1.91% to $101.2 a ton by 0405 GMT, but was down 2.34% so far this week. Recent macroeconomic policies have driven a rebound in ferrous metals, helping iron ore prices rise in the short term, Chinese financial information site Hexun Futures said in a note.
Amid Beijing’s policy shift at the end of September, warehouses replenished stocks before the National Day holiday break, restoring steel mill profits, said Hexun Futures. Daily crude steel production at major Chinese steelmakers in mid-October rose 1.1% from early October to 2.7 million tons a day, said ANZ analysts. Still, data suggests demand remains weak as inventory levels at major Chinese steel mills rose 4.96% in mid-October compared with early October, ANZ said, citing China Iron and Steel Association data.
Industry watchers attributed the slower de-stocking by mills to tepid spot trading activity last week, as demand waned, especially in northern regions where winter has arrived, said Chinese consultancy Mysteel. “The hope is that we will see additional fiscal stimulus on the agenda” for China’s upcoming legislative meeting, expected in the next two weeks, Westpac analysts said.
Source: Brecorder
