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Iron ore futures prices were mixed on Tuesday, as investors digested a raft of key economic targets set by policymakers in top consumer China’s annual meeting of the National People’s Congress.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.69% higher at 879.5 yuan ($122.17) a metric ton.
However, the benchmark April iron ore SZZFJ4 on the Singapore Exchange slipped 1.23% to $114.2 a ton as of 0718 GMT.
As widely expected, the Chinese government is targeting economic growth of around 5% this year, similar to last year, and announced plans to run a budget deficit of 3% of economic output compared to 3.8% last year, official reports showed.
It also plans to issue 1 trillion yuan in special ultra long-term treasury bonds, which are not included in the budget.
“The government promised to issue ultra-long central government special bonds for the next few years, which is a positive surprise and should help mitigate concerns over local government funding shortages amid falling land sales and LGFV deleveraging,” analysts at Goldman Sachs said in a note.
Market participants had been closely monitoring whether there would be more stimulus unveiled at the NPC to restore market confidence and prop up the economy, which will also potentially generate more consumptions for metals.
Although there is no target quite specific to the ferrous metals sector in those reports, investors have been contemplating whether they could find some hints for demand change for steel and steelmaking ingredients this year from pledges for such sectors as property and infrastructure.
Other steelmaking ingredients on the DCE drifted down, with coking coal DJMcv1 and coke DCJcv1 falling 1.89% and 0.87%, respectively.
Steel benchmarks on the Shanghai Futures Exchange also slipped. Rebar SRBcv1 dropped 0.51%, hot-rolled coil SHHCcv1 shed 0.41%, wire rod SWRcv1 lost 0.80% and stainless steel SHSScv1 slid 0.90%.