BEIJING- Iron ore futures rose for a second straight session on Tuesday, underpinned by growing optimism about more stimulus from top consumer China, although fundamentals of the key steelmaking ingredient remained weak.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) climbed 2.59 percent to 791.5 yuan ($111.41) a metric ton, the highest since Oct. 30.
The benchmark December iron ore on the Singapore Exchange added 1.09 percent at $105.05 a ton, the highest since Oct. 17.
Chinese lawmakers reviewed a cabinet bill that would raise ceilings on local government debt to replace existing hidden debt as the standing committee of China’s top legislature started its meeting on Monday, state media Xinhua reported.
That was interpreted by the market as a positive sign, as the heavy burden of local government debt has weighed on investment and economic growth.
“Expectations are rising that this week’s meeting of the National People’s Congress Standing Committee will provide new details of fiscal stimulus measures,” ANZ analysts said.
Reuters exclusively reported last week that China is considering approving new debt issuance of more than 10 trillion yuan to tackle hidden local government debt, fund buybacks of idle land and reduce a giant inventory of unsold flats.
