Benchmark iron ore futures in Dalian and Singapore surged on Friday, adding to weekly gains as China cut its benchmark reference rate for mortgages by an unexpectedly wide margin, boosting hopes for further support to revive the economy.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange ended daytime trade 5.3 percent higher at 842.50 yuan ($126.23) a ton, rebounding after a two-day slump.
On the Singapore Exchange, the steelmaking ingredient’s most-active June contract rallied 6.1 percent to $134.25 a ton.
Steel prices on the Shanghai Futures Exchange and other steelmaking inputs in Dalian also advanced.
Shanghai rebar gained 2.6 percent, while hot-rolled coil rose 2.3 percent and stainless steel jumped 3.4 percent.
Dalian coking coal added 3.2 percent and coke climbed 4.3 percent.
China, in a monthly fixing, lowered the five-year loan prime rate (LPR) by 15 basis points to 4.45 percent, the biggest reduction since the central bank revamped the interest rate mechanism in 2019 and more than the five or 10 basis points tipped by most in a Reuters poll. The one-year LPR was unchanged at 3.70 percent.
The rate-cut comes at a time when central banks around the world are in a race to tighten monetary policy to tackle intensifying inflationary pressures.
