Prices of iron ore and other ferrous commodities dropped on Friday, but most were on track for a weekly gain as traders found comfort in optimism over top consumer China’s policy support to shore up its fragile economy.
The most-traded May iron ore on China’s Dalian Commodity Exchange closed down 0.1 percent at 989.50 yuan ($137.82) per metric ton.
On the Singapore Exchange, the most active February iron ore eased 0.2 percent to $135.10 a ton.
On a weekly basis, Dalian iron rose 4.3 percent, the biggest gain since November 2023, while the Singapore iron ore contract increased 4.2 percent, on track for its best week since last November.
China’s central bank on Wednesday announced a deep cut in the amount of cash banks hold as reserves in a move that will inject about $140 billion of cash into the banking system.
According to a Bloomberg report, Chinese authorities were considering mobilizing about 2 trillion yuan ($278.61 billion) to stabilize a slumping stock market, boosting risk sentiment.
“Any further policy easing could act as an upside catalyst for prices. In addition, we expect fundamentals to turn more price-supportive after the Chinese New Year in mid-February,” Citi analysts said in a note.
