Dalian iron ore climbs

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BEIJING- Iron ore futures rose on Thursday after comments from officials in top consumer China revived hopes for more stimulus measures, although weak fundamentals limited price upside room for the key steelmaking ingredient.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.83 percent  higher at 890 yuan ($123.64) a metric ton.

The benchmark April iron ore on the Singapore Exchange was 0.88 percent  higher at $116.3 a ton.

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The head of China’s state planner said that the government’s 5 percent  economic growth target this year is achievable, while the governor of the People’s Bank of China (PBOC) said there was still room for cutting banks’ reserve ratio requirement (RRR).

“PBOC will deliver a 25bp (basis point) RRR cut in Q2 and another 25bp RRR cut in Q4 to support liquidity and ensure smooth issuance of government bonds,” Goldman Sachs analysts said.

“The PBOC may prefer to keep rates unchanged before the Fed (Federal Reserve) delivers its first rate cut on the back of capital outflow pressures and depreciation concerns,” they added.

Capping ore price gains is the remaining lukewarm demand from steelmakers amid slow downstream demand recovery, said analysts.

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