Prices of steel and steel-making raw materials in China rose on Friday, with iron ore hitting its highest in more than 10 months and rebar posting the best week in over two months, amid optimism over progress in the US-Sino trade talks. US Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for Jan. 30, the Wall Street Journal reported on Thursday.
Mnuchin had not made any such recommendations, while the Journal said trade representative Robert Lighthizer had resisted the idea, a Treasury spokesman said. The most traded iron ore on the Dalian Commodity Exchange gained 3.2 percent to close at 528 yuan ($78.01) a tonne, just below the day's peak of 530 yuan, its highest since early March last year. "The signs out of the recent trade talks in China are promising and have boosted market optimism, despite the lack of concrete outcomes," ANZ Research said in a note.
The recent market rout and weak data coming out of China may force two of the world's largest economies towards a deal, it said. With a deal that could help China avoid a sharper economic downturn, "everything will be back to normal, and demand (for steel) will be coming back, and that will support iron ore price," said Helen Lau, analyst, Argonaut Securities. Ahead of Friday's trading, global miner Rio Tinto said it expected to produce more iron ore in 2019, after logging a slight drop in quarterly iron ore production in December.
Supply-related issues also supported iron ore prices this week. Rio Tinto, the world's No. 2 miner of the steelmaking material, declared force majeure on shipments to some customers following a fire at its Cape Lambert export terminal in Australia. The most-active rebar contract on the Shanghai Futures Exchange rose 2.3 percent to 3,633 yuan a tonne, just below the day's high of 3,636 yuan, and posted its sixth weekly gain in seven weeks.
Hot rolled coil was at 3,518 yuan a tonne, up 1.9 percent. CokiReuters climbed 0.8 percent to 1,238 yuan, after declining for three consecutive days. Coke rose 1.6 percent to 2,065.5 yuan. Earlier in the session, it hit 2,075.5 yuan, its highest in more than two months.
Comments
Comments are closed.