Iron ore futures edged higher on Wednesday after trading in a tight range, as signs of economic stabilisation in China helped offset worries over the struggling property sector in the world’s top steel producer.
The most-traded January iron ore on China’s Dalian Commodity Exchange DCIOcv1 ended daytime trade 0.5% higher at 873.50 yuan ($119.69) per metric ton.
On the Singapore Exchange, the benchmark October iron ore SZZFV3 was up 1.4% at $121.85 per ton, as of 0705 GMT, following two straight sessions of losses.
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The iron ore market was consolidating gains amid an improved outlook for China, ANZ commodity strategists said in a note.
The steelmaking ingredient’s reference price in Singapore has risen more than 5% so far this month and held ground above $120 per ton, buoyed by China’s economic stimulus efforts.
Also helping lift the overall mood, latest indicators showed the world’s second-largest economy was finding its footing after a sharp slowdown – seen as a key reason why China’s central bank kept benchmark lending rates unchanged at a monthly fixing on Wednesday.
“The continued introduction of favourable macroeconomic policies has boosted market confidence,” Huatai Futures analysts said in a note.
China will intensify macro-control efforts and focus on expanding domestic demand, boosting confidence, preventing risk and striving to achieve annual economic development goals, said Cong Liang, vice chairman of the National Development and Reform Commission.
The assurance came as the Asian Development Bank revised its economic growth forecast for developing Asia this year to 4.7%, from 4.8% projected in July, citing the weakness in China’s property sector.
Other steelmaking inputs were also firmer, with coking coal DJMcv1 and coke DCJcv1 on the Dalian exchange up 1.3% and 0.9%, respectively.
But steel benchmarks were broadly lower in Shanghai. Rebar SRBcv1 shed 0.3%, hot-rolled coil SHHCcv1 dropped 0.3%, and wire rod SWRcv1 dipped 2.1%. Stainless steel SHSScv1 gained 0.3%.
Source: Reuters (Reporting by Enrico Dela Cruz in Manila; Editing by Rashmi Aich and Subhranshu Sahu)