Singapore iron ore futures rebounded on Thursday as sentiment improved after the Federal Reserve signalled a shift towards a pause in rate hikes following the turmoil in financial sector triggered by the recent collapse of two U.S. banks.
The benchmark April iron ore on the Singapore Exchange traded 1.31% higher at $121.85 a tonne, as of 0211 GMT, and was set to snap three days of losses.
The members of the Federal Open Markets Committee said on Wednesday some additional tightening might be possible, but suggested it was on the verge of pausing future hikes in view of recent crisis in the banking sector.
- Promotional Ads -
Lifting market sentiment, the northern Chinese cities of Handan and Tangshan – two major steelmaking hubs – decided to remove the latest round of production curbs as air quality improved.
The latest emergency response in both hubs was implemented from March 17 and March 20, respectively. Local steel mills are typically required to curb production over the period.
“It’s normal to see an upward correction after a steep fall the previous day. And sentiment in the secondary market is recovering at the moment,” said Pei Hao, a Shanghai-based senior analyst at the international brokerage firm FIS.
The most-traded May iron ore futures contract on Dalian Commodity Exchange (DCE)DCIOcv1 consolidated at 870.5 yuan ($127.04) a tonne, as of 0215 GMT.
Prices of other steelmaking raw materials such as coking coal and coke similarly recorded some gains with the former DJMcv1 climbing 0.9% and the latter DCJcv1 rising 0.37%.
A rebound in raw materials prices lent some support to the steel market. Rebar on the Shanghai Futures Exchange SRBcv1 edged up 0.14% to 4,160 yuan a tonne, hot-rolled coil SHHCcv1 gained 0.33%, and wire rod SWRcv1 moved up 0.4%.
Stainless steel SHSScv1 lost 0.57%.
Source: Reuters (Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Sherry Jacob-Phillips)