Iron ore gains on firm near-term demand, more China rate cuts
BEIJING, Oct 21 (Reuters) – Iron ore futures rose on Monday as near-term demand remained firm and the latest rate cut in top consumer China lifted sentiment, but gains were capped by caution on exactly how much boost the steel market would receive.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.45% higher at 769.5 yuan ($108.18) a metric ton.
The benchmark November iron ore on the Singapore Exchange climbed 0.41% to $102.1 a ton, as of 0701 GMT.
Near-term demand for the key steelmaking raw material held firm thanks to better steel margins, said analysts.
Daily average hot metal output gained for a seventh straight week, rising 0.5% to 2.34 million tons as of Oct. 18, while profitability climbed for the eighth consecutive week to 74.46%, a survey of steelmakers conducted by consultancy Mysteel showed.
Meanwhile, China cut benchmark lending rates at the monthly fixing on Monday after trimming other policy rates last month as part of a package of stimulus measures to revive the economy, boosting the broad commodities markets including steel and iron ore.
Price gains, however, were capped by lingering doubts on a quick boost in demand from the raft of stimulus measures in the world’s second-largest economy, which is also the world’s biggest consumer of metals.
“While the focus on reducing inventory is likely to speed up the recovery, it will have little impact on steel and iron demand in the short term,” analysts at ANZ said in a note.
Other steelmaking ingredients on the DCE gained, with coking coal and coke adding 1.3% and 0.6%, respectively.
Source from Reuters: https://www.reuters.com/markets/commodities/iron-ore-gains-firm-near-term-demand-more-china-rate-cuts-2024-10-21/