SINGAPORE- Dalian iron ore recouped from a selloff in the previous session to rise 5 percent on Thursday, as the dollar eased, although concerns over a global recession and new COVID-19 restrictions in China persisted.
The euro huddled at a two-decade low on Thursday and oil nursed losses as investors fretted about a looming recession, while equities were caught between growth worries and relief that a slowdown might put the brakes on interest rate hikes.
The most-traded iron ore on the Dalian Commodity Exchange climbed 5 percent to 764 yuan ($114.02) a ton and August contract on the Singapore Exchange gained 1.9 percent at $113.30 a ton.
Dalian iron ore has fallen for four sessions out of six.
Coking coal rose 5.3 percent and coke jumped 4.8 percent.
The dollar eased 0.2 percent after scaling a 20-year peak against its rivals, making greenback-denominated metals slightly less expensive for other currency holders.
The head of the International Monetary Fund (IMF) on Wednesday said the outlook for the global economy had “darkened significantly” since April and she could not rule out a possible global recession next year given the elevated risks.
China is fighting nascent COVID-19 flare-ups across the country with mass testing and fresh restrictions, including in weary Shanghai where new cases have been linked to a building which houses a karaoke lounge that was operating illegally.
Copper prices climbed as a slight pullback in the US dollar prompted some investors to return to the market after heightened recession fears sent the red metal to its lowest level in nearly 20 months.
Three-month copper on the London Metal Exchange was up 3 percent at $7,748 a ton, after hitting its lowest since November 2020 at $7,291.50 on Wednesday.
The most-traded August copper contract in Shanghai rose 2.3 percent to 59,210 yuan ($8,837.05) a ton by midday trade.
“We are seeing some bit of softening trend in the US dollar index and a bit of short-covering after a broad-based selloff in commodities,” said Kunal Shah, head of research at Nirmal Bang Commodities.
“Overall, the sentiment is still bearish because global growth is faltering. There are supply disruptions, but demand destruction is far bigger than the supply concerns, hence, we are going to see further downside.”
The dollar slipped 0.2 percent after scaling a 20-year peak against its rivals, making greenback-denominated metals slightly less expensive for other currency holders. – Reuters
