Iron ore climbs

- Advertisement -

BEIJING- Iron ore strengthened on Monday as investor sentiment was boosted by the latest China stimulus, although downward pressure from production cuts among some steel mills due to shrinking margins and weak demand lingered.

The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) rose 1.13 percent  to 847.5 yuan ($115.96) a metric ton as of 0215 GMT.

The benchmark November iron ore on the Singapore Exchange was 0.62 percent  higher at $115 a ton, as of 0217 GMT.

- Advertisement -spot_img

China’s central bank ramped up liquidity support to the banking system by conducting medium-term lending facility (MLF) operations worth 789 billion yuan.

With 500 billion yuan worth of MLF loans maturing, the PBOC is injecting fresh liquidity into the banking system.

“Prices remained firm as constrained supply for steel scrap resulted in robust consumption for iron ore,” analysts at Huatai Futures said in a note.

“The continuously falling profits among mills have seen some of them cut outputs, denting interest for raw materials.”

Low inventories also lifted sentiment in the iron ore market, as stocks slid for five consecutive weeks to 105.2 million tons as of Oct. 13, the lowest since June 2020, data from consultancy Steelhome showed.

However, the deepening crisis in China’s property sector, the world’s largest steel consumer, is likely to keep demand depressed despite further stimulus, ANZ bank analysts warned in a note. – Reuters

Author

Share post: