The firm sees the Chinese economy growing “plus or minus 5%”, which should support solid commodities demand, Rio’s CEO Jakob Stausholm said.

Iron ore price rises to more than 1-week high on upbeat demand outlook

| August 1, 2024 | 6:48 am

Reuters| August 1, 2024 | 6:48 amMarketsAustraliaChinaIron Ore

Rio Tinto’s Pilbara operation – Image Courtesy ofRio Tinto

Iron ore futures prices rose to a more than one-week high on Thursday, buoyed by top producer Rio Tinto’s optimistic demand outlook for top consumer China and continued hopes of more stimulus from the world’s second-largest economy.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.35% higher at 783.5 yuan ($108.28) a metric ton.

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The contract hit an intraday high of 790.5 yuan, its strongest level since July 23.

The benchmark September iron ore on the Singapore Exchange was 1.91% higher at $102.85 a ton, as of 0720 GMT.

Rio Tinto, the world’s largest iron ore producer, reported higher first-half underlying earnings on Wednesday and its upbeat comments on China boosted iron ore contracts, ANZ analysts said in a note.

The firm sees the Chinese economy growing “plus or minus 5%”, which should support solid commodities demand, Rio’s CEO Jakob Stausholm said.

Stausholm cited the “enormous” impact of China’s green transition on steel demand, which he also expects to feed into higher consumption of high-grade iron ore.

Weaker-than-expected Chinese economic data added to hopes for further government stimulus, said Westpac analysts.

A private-sector survey published on Thursday found China’s factory activity shrank for the first time in nine months, coming on the heels of an official PMI survey that showed manufacturing activity slipped to a five-month low.

Still, China has the ability and confidence to achieve its full-year growth target of around 5% and will work to actively expand domestic demand, state planner officials said.

Other steelmaking ingredients on the DCE fell, with coking coal and coke down 1.68% and 1.18%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were higher. Rebar climbed nearly 1.1%, hot-rolled coil added almost 0.8%, stainless steel advanced about 0.7%, and wire rod inched up 0.24%.

($1 = 7.2359 Chinese yuan)

(By **rielle Ng; Editing by Savio D’Souza and Mrigank Dhaniwala)