SINGAPORE – Iron ore futures prices climbed on Thursday, buoyed by China’s renewed efforts to curb price wars, triggered by intensifying competition, and reduce excess industrial capacity.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 1.33 percent higher at 725 yuan ($101.19) a metric ton.
The benchmark August iron ore on the Singapore Exchange was 0.05 percent lower at $95.1 a ton.
Beijing’s commitment to curbing low-price competition and reducing excess industrial capacity is an indication that China’s leaders are seeking to address the deflationary pressures affecting the economy, analysts from ANZ said in a note.
These measures are expected to provide some relief to the steel industry, which has been struggling with overcapacity, ANZ said.
Meanwhile, shipments from top producers Australia and Brazil have decreased, even as the output of molten iron continued to increase month-on-month in June, broker Everbright Futures said in a note.
Shipments from major iron ore companies such as Rio Tinto, BHP, Fortescue Metals Group, and Vale, also decreased from the previous month, said Hexun Futures.
The Chinese yuan weakened against the dollar on Thursday, as the market kept a close watch on trade negotiations between the US and other countries.
