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Iron ore futures prices rebounded on Thursday, aided by renewed hope of further stimulus from top consumer China following a speech from a state planning official.
The benchmark February iron ore on the Singapore Exchange climbed 2.48% to $128.9 a metric ton, as of 0811 GMT.
Meanwhile, the most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 0.8% higher at 948.5 yuan ($131.85) a ton, erasing earlier losses. The contract hit its lowest level since Dec. 19 at 920.5 yuan a ton in the morning.
China will place greater emphasis on expanding effective demand, developing and strengthening the real economy, an official from the country’s National Development and Reform Commission was quoted as saying by thestate media on Thursday.
“There is nothing that’s really new or material (in the latest speech), but the positive stance from the state planner may inject some confidence into the market,” said a Chinese analyst, requesting anonymity as he is not authorised to speak to the media.
The rebound in prices came after continued downward pressure. A shakier-than-expected economic recovery in China, a deepening property crisis, mounting deflationary risks and tepid demand have cast a pall over the outlook for this year.
One of the leading iron ore suppliers, BHP BHP.AX reported a small 2.2% drop in second-quarter iron ore production that was in line with analyst forecasts, as it ties in its rail line to a central production hub in the Pilbara region in Australia.
Other steelmaking ingredients on the DCE posted gains, with coking coal DJMcv1 and coke DCJcv1 up 0.58% and 0.35%, respectively.
Steel benchmarks on the Shanghai Futures Exchange also regained some footing on higher raw materials costs.
Rebar SRBcv1 added 0.28%, hot-rolled coil SHHCcv1 rose 0.17%, wire rod SWRcv1 jumped 1.27% and stainless steel SHSScv1 nudged up 0.18%.