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Benchmark Dalian and Singapore iron ore futures rebounded on Wednesday from two-week lows, after Chinese Vice Premier Liu He indicated Beijing’s plans to take measures to boost the domestic economy and ensure stable capital markets.
Liu’s comments spurred a strong afternoon bounce in Chinese ferrous futures already buoyed by demand hopes as favourable weather in top steel producer China is expected to encourage mills to ramp up output.
The most-traded iron ore, for May delivery, on China’s Dalian Commodity Exchange ended daytime trade 5.2% higher at 804 yuan ($126.65) a tonne after a two-day sell-off.
On the Singapore Exchange, the steelmaking ingredient’s front-month April contract climbed as much as 9.9% to $151.25 a tonne after six straight sessions of losses.
Liu’s remarks helped soothe worries about the fallout from China’s soaring COVID-19 cases and the Russia-Ukraine conflict, which rattled Chinese asset markets on Tuesday.
Other steelmaking ingredients also rebounded from two-week lows, with Dalian coking coal DJMcv1 up 3.2%, while coke gained 2.1%.
“With the closing of the national ‘two sessions’ and the Winter Paralympic Games, and the heating season about to end, steel mills in the northern region are expected to resume production,” analysts at Sinosteel Futures said in a note.
Also picking up from two-week lows, construction steel rebar on the Shanghai Futures Exchange SRBcv1 rose 3.2% and hot-rolled coil climbed 2.6%.
Shanghai stainless steel jumped 5.2%, rising for a third day as prices of raw material nickel rallied.
China said on Tuesday it had seen increasing positive changes in its economic performance backed up by surprisingly good economic data, but the impacts of the latest COVID resurgence needed to be watched.
Amid Tuesday’s sell-offs in China’s ferrous futures markets, spot iron ore slumped to a two-week low of $141.50 a tonne, SteelHome consultancy data showed.