Iron ore futures rose on Friday, with the Singapore benchmark on track for its biggest weekly gain since June, buoyed by China’s move to bolster economic stimulus efforts even as the country’s steel output shrank in August.
Benchmark October iron ore on the Singapore Exchange (SGX) climbed as much as 2.4 percent to $123.50 per metric ton, its strongest since mid-March. For the week, it has risen more than 8 percent , its biggest since the week ended June 9.
The steelmaking ingredient’s most-traded January contract on China’s Dalian Commodity Exchange ended daytime trade 2.3 percent higher at 879 yuan ($120.91) per ton. It earlier hit a contract high of 881.50 yuan.
China’s central bank on Thursday said it would cut the amount of cash that banks must hold as reserves for the second time this year to boost liquidity – the latest in a series of stimulus measures, including steps to support a struggling property sector.
The reduction in banks’ reserve requirement ratio demonstrates China’s resolve to boost market confidence, Huatai Futures analysts said in a note.
“We should closely track the market opportunities brought about by macroeconomic policies and the intensity of raw material replenishment in the coming winter,” they said. – Reuters
