Dalian iron ore posts fourth weekly gain on China stimulus hopes
Band Enrico Dela Cruz
March 18 (Reuters) – Chinese iron ore futures hit a week-long high on Friday to mark their fourth consecutive weekly gain, as hopes of further stimulus to shore up the world’s top steel producer trumped concerns regarding COVID-19 restrictions and global uncertainties.
China’s economic czar, Vice Premier Liu He, this week called for the deployment of market-friendly policies to support the world’s second-largest economy and the largest consumer of metals, amid concerns over the local COVID outbreak and the impact on world trade of Russia-Ukrainian conflict.
Meanwhile, China’s central bank governor, Yi Gang, pledged to take monetary policy initiatives, increase new lending and resolutely support the economy.
“The door to RRR (required reserve ratio) and interest rate cuts has not yet been closed, and more easing policies are expected to be introduced in the future,” Huatai Futures analysts said. in a note.
May’s most traded iron ore on China’s Dalian Commodity Exchange DCIocv1 ended the day’s trade up 3.5% at 833.50 yuan ($131.20) a ton, after earlier touching 835 yuan, its highest level since March 11. The steel ingredient was up 1% this week.
Dalian iron ore peaked this year at 874.50 yuan a ton on March 8, before traders reduced positions amid concerns over China’s biggest COVID-19 outbreak since 2020.
On the Singapore Stock Exchange, the most active April contract in iron ore SZZFJ2 rose 2.5% to $152.40 a tonne at 0711 GMT.
Spot 62% iron ore was flat at $146.50 a tonne on Thursday, after rising for the first time in a week SH-CCN-IRNOR62SteelHome consulting data showed.
“The government could accelerate infrastructure spending and post-closure construction work to meet the demanding goal of economic growth,” JPMorgan analysts said in a note.
Structural steel rebar on the Shanghai Futures Exchange SRBcv1 gained 1%, while hot rolled coils SHHCcv1 climbed 1.2%. Stainless steel SHSScv1 increased by 0.6%.
Dalian Coking Coal DJMcv1 jumped 5.7% to its highest since March 11, while coke DCJcv1 advanced by 3.8%.
(Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu)
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