BEIJING: Iron ore futures rebounded on Tuesday, as improved downstream steel demand and expectations of more stimulus from top consumer China boosted sentiment.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.51% higher at 818 yuan ($112.34) a metric ton.
The benchmark March iron ore on the Singapore Exchange surrendered earlier loss to jump 1.18% to $106.95 a ton as of 0718 GMT.
Transaction volumes of steel products in east China’s Hangzhou beat expectations, bolstering sentiment and sending ore prices higher, said a Shanghai-based analyst and a Singapore-based trader.
Both requested anonymity as they are not authorised to speak to media.
Additionally, ANZ analysts flagged that “there is speculation that the upcoming “Two Sessions” in China will provide more proactive policies aimed at stimulating consumption”.
Parliamentarians and political advisers will gather in Beijing next month for two parallel sets of meetings called “Two Sessions”.
“With the resumption of exports from Australia’s biggest iron ore port, the market is shifting its focus to broader demand dynamics,” ANZ added.
Iron ore shipments from Australia were expected to pick up as major ports reopened after the tropical cyclone Zelia, sending prices lower on Monday.
GF Futures analysts said a slow recovery in ore demand will keep a lid on upside of ore prices, while expecting hot metal output, a gauge of iron ore demand, to hover at a similar level as consultancy Mysteel’s assessment as of February 14.
Other steelmaking ingredients on the DCE advanced, with coking coal and coke rising 1.34% and 1.61%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar added 1.35%, hot-rolled coil rose 1.3% and wire rod gained 0.31% and stainless steel inched up 0.04%.
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