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Iron ore futures rose on Thursday, as optimism over an economic recovery in top steel maker China lifted demand sentiment, while traders continued bargain-buying following a recent slump in prices.
The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) ended day-time trade 1.6% higher at 852.5 yuan a tonne, off an earlier high.
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 1.7% at $123.70 a tonne as of 0726 GMT.
Iron ore futures have gained amid rising optimism on China’s reopening, forcing China’s state planner to issue its third warning this month about excessive speculation, ANZ Research said in a note.
China is set to be a stabilizing force for commodities demand this year as developed nations face economic headwinds, BHP Group Ltd BHP.AXsaid on Thursday as it posted higher quarterly iron ore shipments that beat expectations.
Chile’s committee of ministers denied permits for Andes Iron’s $2.5 billion Dominga copper and iron mining project, Environment Minister Maisa Rojas announced on Wednesday.
Asian stock markets struggled to make headway on Thursday, after weak U.S. consumer data stoked recession worries and nudged investors toward safe assets such as bonds, while Japan’s yen rose as markets doubted the Bank of Japan’s policy commitments.
The most-active rebar contract on the Shanghai Futures Exchange SRBcv1rose 1.0%, hot-rolled coil SHHCcv1gained 0.9%, wire rod SWRcv1 edged up 0.6%, and stainless steel SHSScv1inched 0.1% higher.
Dalian coking coal DJMcv1 and coke DCJcv1rose 0.6% and 0.5%, respectively.
Coking coal futures have posted gains, after recent flooding in Queensland had caused supply outages – rail operator Aurizon have applied speed restrictions across its network while ports have been temporarily impacted, ANZ Research’s note added.