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Tuesday, September 24, 2024 - 14:21:06
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Prices of iron ore futures surged on Tuesday to log their largest intraday gain in more than a year, as a wave of fresh monetary stimulus from China and restocking ahead of the top consumer’s national holidays lifted market sentiment.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 4.64% higher at 699.5 yuan ($99.38) a metric ton, recording its steepest daily rise since May 29, 2023.
The benchmark October iron ore on the Singapore Exchange traded 5.8% higher at $94.65 a ton.
China’s central bank unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk and back towards the government’s growth target, but analysts warned more fiscal help was vital to hit these goals.
The broader-than-expected package offering more funding and rate cuts marks Beijing’s latest attempt to restore confidence after a slew of disappointing data raised concerns of a prolonged structural slowdown.
“The fundamentals of China’s imported iron ore market brightened over the past week, as rising production at domestic steel mills meant demand for the feedstock stayed firm,” Chinese consultancy Mysteel said in a note.
Domestic steelmakers slowly lifted their hot metal output after profits on steel sales recovered due to revived end-user consumption, and mills’ replenishment demand for iron ore ahead of the upcoming National Day holiday from Oct. 1-7 will further improve fundamentals, Mysteel said.
Iron ore prices are expected to fluctuate before the holiday, as short-term inventory pressure is still relatively large, said Chinese financial information site Hexun Futures.
Other steelmaking ingredients on the DCE rebounded, with coking coal and coke up 3.33% and 3.94%, respectively.
Steel benchmarks on the Shanghai Futures Exchange posted further gains. Wire rod climbed 2.47%, rebar added around 3.2%, hot-rolled coil advanced almost 3.5%, although stainless steel lost 0.76%.
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