Iron ore futures buoyed by China demand sentiment despite early-week slump
Iron ore futures rose on Friday as continued optimism about an economic recovery in top steel producer China lifted demand sentiment, although they still posted weekly losses due to a slump in prices early in the week.
The most-traded May iron ore on China’s Dalian Commodity Exchange ended day-time trade 1.8% higher at 865.0 yuan ($127.51) a tonne.
The DCE will be closed from Jan. 21-27 for the Lunar New Year holidays. Trading will resume on Jan. 30.
On the Singapore Exchange, the benchmark February iron ore (SZZFG3) was up 1.8% at $125.95 a tonne, as of 0715 GMT.
Sentiment is riding high as optimism for stronger Chinese demand continues to rise.
BHP CEO Mike Henry said China’s pro-growth policies, including those in the property sector, and easing COVID-19 curbs could support progressive improvement in the second half of the year, ANZ Research said in a note.
Asian equity markets and crude oil rose on Friday amid optimism about China’s reopening following the lifting of stringent COVID curbs, as markets prepared for the Lunar New Year holidays.
The most-active rebar contract on the Shanghai Futures Exchange was largely unchanged, down 0.02%, hot-rolled coil edged down 0.3%, meanwhile stainless steel inched 0.03% higher, and wire rod (SWRcv1) gained 0.2%.
Dalian coking coal fell 0.6% while coke (DCJcv1) rose 0.1%.
For now, supply and demand of coking coal and coke are lower as activities in all links of the industrial chain slow down ahead of the Lunar New Year holidays – the big question is the extent to which demand recovers after the break, Huatai Futures said in a research note.