Iron ore futures prices extended their rise to hit the highest level in multiple weeks on Monday, bolstered by an obvious reduction in shipments and hopes that top consumer China will roll out more stimulus to prop up its economy.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.18% higher at 845.5 yuan ($116.80) a metric ton, the highest since Mar. 26.
The benchmark May iron ore on the Singapore Exchange was 1.31% higher at $112.5 a ton, as of 0720 GMT, the highest since Mar. 11.
Dalian iron ore rose for a sixth straight trading session, while the Singapore contract rose for a third straight session.
Iron ore shipments from top suppliers Australia and Brazil tumbled by 28.8% week-on-week to 19.19 million tons in the week of Apr.8-14, data from consultancy Mysteel showed.
China’s economy is expected to have slowed in the first quarter as a protracted property downturn and weak private-sector confidence weighed on demand, maintaining pressures on policymakers to unveil more stimulus measures.
Also, new-bank lending in China rose less than expected in March from the previous month, while broad credit growth hit a record low and property woes lingered.
State-backed Chinese real estate developer Vanke said it is facing short-term liquidity pressures and operational difficulties but has prepared “a basket of plans” to stabilize its business and cut debt.
Other steelmaking ingredients on the DCE recorded gains, with coking coal and coke up 3.97% and 2.92%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed.
Rebar was little moved, wire rod declined 0.99%, while stainless steel added 1.2% and hot-rolled coil ticked up 0.32%.
“Given the remaining high steel stocks, a further increase in hot metal output might not be conducive to the sustainability of a price rebound,” analysts at First Futures said in a note.
China is due to release a slew of key data, including output of key commodities, property investment, and the economic growth for the first quarter, on Tuesday.
($1 = 7.2386 Chinese yuan)
(By Amy Lv and Andrew Hayley; Editing by Savio D’Souza and Janane Venkatraman)
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