Iron ore futures prices rose on Monday to their highest levels in nearly two weeks, helped by better-than-expected factory data in top consumer China and hopes of more stimulus measures in the world’s second-largest economy later this month.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.5% higher at 840 yuan ($115.58) a metric ton, the highest level since June 18.
The benchmark August iron ore on the Singapore Exchange was nearly 1.7% higher at $108.4 a ton, as of 0707 GMT, the highest since June 20.
The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 51.8 in June from 51.7 in the previous month, marking the fastest clip since May 2021 and surpassing analysts’ forecasts of 51.2.
The official manufacturing PMI was unchanged from May at 49.5 in June, data showed on Sunday, below the 50-mark separating growth from contraction and in line with a median forecast of 49.5 in a Reuters poll.
The expectation that hot metal output will fall significantly receded after the latest property stimulus in Beijing, analysts at Jinrui Futures said in a note.
China’s capital city Beijing unveiled last week measures to reduce the cost of buying a home by cutting mortgage interest rates and the minimum down payment ratio.
Additionally, some investors and traders are bearing hopes for possibly more stimulus from the long-delayed third plenum to be held from July 15 to July 18.
Other steelmaking ingredients on the DCE gained ground, with coking coal DJMcv1 and coke DCJcv1 up 2.8% and 3.3%, respectively.
Steel benchmarks on the Shanghai Futures Exchange posted gains. Rebar SRBcv1 ticked 0.7%higher, hot-rolled coil SHHCcv1 advanced 0.6%, wire rod SWRcv1 edged up nearly 0.8%and stainless steel SHSScv1 added nearly 0.9%.
“The room for a further fall in steel prices in the second half of the year is limited as the valuation has already stayed at a relatively low level and many mills are suffering loss,” Everbright Futures said in a note.
Source: Reuters (Reporting by Amy Lv and Mei Mei Chu; Editing by Mrigank Dhaniwala)
