Iron ore futures advanced on Friday and were set for their third straight weekly rise, as top steel producer China’s latest moves to shore up its flagging economy brightened demand prospects.
Expectations that Beijing will take more policy actions to support the economy, after easing some of its strict COVID-19 containment rules and unveiling fresh measures to aid an ailing property sector, added to the buoyant mood.
The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade 3.3 percent higher at 753.50 yuan ($105.76) a ton. Earlier in the session, it hit the highest level since Aug. 1 at 757.50 yuan.
“(China’s) stimulus policies have pushed up price expectations for iron ore,” Huatai Futures analysts said in a note.
China should set its economic growth target no lower than 5 percent for 2023, Liu Shijin, a policy adviser to the People’s Bank of China (PBOC), said on Friday, supporting Beijing’s pro-growth stance.
On the Singapore Exchange, benchmark December iron ore was up 2.1 percent at $98.95 a ton.
China has fine-tuned its zero-COVID strategy, which has caused significant economic damage, even as the number of new infections is surging.
“Looser quarantine rules suggest an end to the restrictions is closer than we thought,” ANZ commodity strategists said in a note.
Projecting a “softer landing” now for the Chinese property sector, ANZ has increased its forecast for China’s 2023 steel output to 1.05 billion tons from 1.01 billion tons, and expects the iron market to remain in deficit.
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