BEIJING: Prices of iron ore futures climbed to a four-week high on Thursday, supported by reduced shipments from a major producer and growing expectations of further rate cuts by the Federal Reserve following cooler-than-expected US inflation data.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.92% higher at 797 yuan ($108.71) a metric ton, its highest since Dec. 18, 2024.
The benchmark February iron ore on the Singapore Exchange climbed 1.87% to $102.45 a ton by 0722 GMT, the highest since Dec. 19. Leading iron ore supplier Rio Tinto reported its lowest annual shipments in two years, partly as heavy rains in Western Australia impacted output in the December quarter.
Also providing some support to the key steelmaking ingredient was a weaker US dollar, which makes dollar-denominated commodities cheaper for holders of other currencies. Additionally, signs of possibly higher ore demand in the coming weeks supported prices, said analysts, referring to a likely rise in hot metal output. Boosting overall sentiment, Country Garden, once China’s top developer by sales, said it expects to report a smaller annual loss for 2024 as the struggling developer works to revive its business.
Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 3.83% and 3.45%, respectively, as some traders liquidated short positions, said analysts. Most steel benchmarks on the Shanghai Futures Exchange ticked up. Rebar added 1.22%, hot-rolled coil advanced 1.09%, stainless steel gained 0.56%, wire rod rose 0.46%.
“The recent wave of prices gains mainly benefited from improved expectations for steel consumption boosted by the macro sentiment,” said Zhuo Guiqiu, analyst at Jinrui Futures. “The restocking expectations aggravated price volatility amid low steel inventories.
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