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Dalian iron ore ended a volatile daytime session higher on Thursday, with traders clinging to bets that top steel producer China will roll out more measures to support its struggling economy.
China will step up the implementation of its prudent monetary policy and stabilise employment and prices in an effort to consolidate and improve an upward trend of the economy amid rising downside risks from the global economy, the country’s central bank said on Wednesday.
The most-traded iron ore for January delivery on China’s Dalian Commodity Exchange DCIOcv1 was up 1.7% at 740 yuan ($103.85) a tonne at the end of daytime trading, after swinging between losses and gains during the session.
On the Singapore Exchange, the steelmaking ingredient’s benchmark December contract SZZFZ2 was up 0.2% at $97.20 a tonne as of 0904 GMT.
Iron ore has staged an epic rebound after the October sell-off, fuelled by optimism that recent policy actions in China would boost demand for steel and its raw materials.
China has eased some of its COVID-19 containment rules and unveiled measures to support an ailing property sector that accounts for a sizeable portion of domestic steel demand.
Still, doubts remain if the measures are enough.
“The government’s recent actions to step up support for developers’ funding could improve the companies’ financial flexibility and partly temper their near-term refinancing pressures,” said Kelly Chen, vice president and a senior analyst with Moody’s Investors Service.
“But the impact would be subject to the extent and timing, as well as the effectiveness of these measures.”
Moody’s is maintaining a negative outlook on China’s property sector due to expectations of continued weakness in property sales.
Rebar on the Shanghai Futures Exchange slipped 0.1%, while hot-rolled coil and wire rod were flat. Stainless steel slumped by 2.4%.
Both Dalian coking coal and Dalian coke climbed 0.5%.