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China’s iron ore futures climbed to the highest level in more than three weeks amid renewed expectations that the authority will introduce more supportive policy to bolster economic recovery.
The most-traded iron ore futures contract on the Dalian Commodity Exchange, for January delivery, jumped more than 4% to hit 769.5 yuan per tonne, the highest in more than three weeks and extending gains to a sixth session,
The benchmark iron ore futures contract on the Singapore Exchange jumped nearly 5% to hit $105.75, marking the highest level in more than two weeks.
China will strengthen the coordination of various policies to boost economic growth and meet this year’s economic target, according to a cabinet meeting chaired by Premier Li Qiang on Wednesday.
The country will continue to introduce policies for boosting consumption and promoting investment, Li said.
A weakening yuan, the wide difference between spot and futures prices and the remaining high levels of hot metal output all provide support to iron ore prices, Soochow Futures said in a note
Analysys, however, cautioned that the gloomy demand outlook amid the struggling property sector and looming steel production curbs continued to act as headwinds for steelmaking ingredients.
China’s total inventory of the five major steel products declined by 152,800 tonnes this week from the previous week to 16.6 million tonnes, with inventory at steel mills falling by 49,200 tonnes to 4.498 million tonnes and social inventor falling by 103,600 tonnes to 12.1 million tonnes, according to data from consultancy Mysteel.
China’s total steel product output rose by 9,100 tonnes to 9.3 million tonnes, according to the data.
