Iron ore responds positively on China’s plan of economic support

BY ONOME AMUGE

Iron ore futures rose for the fourth straight session in the day to post over four percent gain, fueled by demand hopes as authorities in Beijing, China’s capital city, pledged to step up policy support to stabilise the economy amid the country’s Covid-19 resurgence.

A Politburo meeting chaired by President Xi Jinping said the world’s second largest economy would adopt a package of policies to support pandemic-hit industries, stepping up infrastructure construction and promoting healthy development of the property market.

Following the report, futures prices of steelmaking ingredients and construction materials firmed, with benchmark iron ore on the Dalian Commodity Exchange jumping 4.2 percent to 870 yuan or $132.05 a tonne at the close of the week’s trade.

Also, coking coal futures for September delivery rose 0.9 percent to 2,853 yuan per tonne, while Dalian coke was up 2.1 percent to 3,625 yuan a tonne.

Steel rebar on the Shanghai Futures Exchange, for October delivery, gained 1.6 percent at 4,910 yuan a tonne, while hot rolled coils used in the manufacturing sector were up 1.5 percent to 4,996 yuan per tonne.

On the downside, Shanghai stainless steel futures for June delivery shed 0.6 percent to 19,360 yuan a tonne, down 3.9 percent for the month, while rebar and hot rolled coils declined three percent and 4.4 percent, respectively in April, hurt by sluggish consumption attributed to the Covid pandemic and transportation disruptions.

However, inventory data from the country’s leading steel market report agency, Mysteel Consultancy, showed that demand for major steel products gradually recovered since mid-April to stand at 10.35 million tonnes in the last week of the month.