China’s iron ore and construction steel rebar futures jumped more than 5 percent in early trade after latest data showed a decline in the number of new infections from a coronavirus outbreak.
While the death toll from the epidemic in China has climbed above 1,000, the 2,097 new cases on Monday were down from 2,618 the previous day, bringing the total to more than 42,000.
However, this is not the first time new cases have fallen. China’s worst-hit province of Hubei reported 2,841 cases on Feb. 7 and 2,147 the next day.
“I think it is a bit of a relief rally as China reported less new confirmed cases nationwide, sparking hopes that the spread of the coronavirus outbreak has been contained,” said Helen Lau, metals and mining analyst at Argonaut Securities in Hong Kong.
The Dalian Commodity Exchange’s most-traded iron ore contract, with May expiry, rose as much as 5.5 percent to 612 yuan ($87.71) a ton.
On the Singapore Exchange, the front-month March contract jumped as much as 4.6 percent to $83.45 a ton.
The benchmark Dalian contract has shed 12 percent from Feb. 3 up to Monday on concerns about demand prospects for iron ore in top steel producer China.
The epidemic could trim China’s full-year economic growth rate by as much as 1 percentage point in 2020, according to Zeng Gang, the vice chair of Chinese government think tank National Institute for Finance and Development.
In spot markets, however, demand for steel products and iron ore remained weak amid industry shutdowns in China, according to Lau. — Reuters
