Iron Ore prices spike as Beijing takes slew of steps to aid the economy
Futures rallied more than 4% in Singapore, then pared some of their initial gains, after central bank governor Pan Gongsheng said that policymakers would help banks boost lending to consumers, cut the key short-term interest rate, and lower mortgage rates on existing housing loans.
The steelmaking staple has been among the worst performing major commodities this year as China’s slowdown — especially the nation’s drawn-out property crisis — has hurt demand, with mills reducing steel output. At the same time, major, low-cost miners in Australia and Brazil have been boosting supplies, driving the seaborne market into a surplus.
“The rebound may continue for a while due to stronger confidence, but the actual impact on the supply-and-demand dynamic is still uncertain,” said Han Jing, an analyst at SDIC Essence Futures Co.
Futures gained as much as 4.1% in Singapore, before trading 2% higher at $91.25 a ton at 9:53 AM The commodity remains more than a third lower this year. In China, yuan-priced steel futures climbed in Shanghai.
“Today’s policy is helpful in boosting market sentiment,” said Wei Ying, an analyst at China Industrial Futures Ltd. “However, the domestic economy issue is very complicated, so monetary loosening might not be enough,” Wei added, citing the need to watch for additional fiscal policies.
Base metals were mixed after the stimulus announcement. Copper was trading 0.3% higher on the London Metal Exchange at $9,573 a ton, aluminum was flat and tin dipped.
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