SINGAPORE: Iron ore futures climbed on Monday as prospects of further fiscal stimulus from China lifted sentiment in the top consumer’s steel market.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 2.87% higher at 807.5 yuan ($114.16) a metric ton. The contract had jumped over 3% earlier in the session. The benchmark November iron ore on the Singapore Exchange was 2.11% higher at $108.45 a ton, as of 0350 GMT. Steel benchmarks on the Shanghai Futures Exchange gained ground.
Rebar strengthened nearly 1.8%, hot-rolled coil advanced about 2%, wire rod added 1.17% and stainless steel ticked 0.36% higher. China on Saturday pledged a new package of incremental fiscal policies, which lifted sentiment across various commodities markets, including steel, said Chinese consultancy Mysteel.
With steel product prices propped up, the number of integrated steel mills in China finally earning profits on steel sales rapidly increased, leading the average operational rate among 87 steelmakers to climb by 1.85 percentage points during Oct. 4-11, Mysteel added.
However, signs of deflation in the top consumer and a lack of clarity on its stimulus measures clouded the outlook.
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