Iron ore futures surged on Tuesday following Beijing’s announcement of monetary stimulus aimed at supporting the economy.
China’s central bank introduced several policy measures, including a cut to the reserve requirement ratio, which determines the amount of cash banks must hold in reserve. This move will release around USD 142 bln liquidity into the financial market.
Additionally, the central bank plans to cut key interest rates, lower the minimum down-payment ratio for second-home buyers nationwide to 15pct from the current 25pct, and implement various measures to support commercial banks and the capital market.
Reflecting optimism over future demand, major Chinese steel producer Shagang increased its list prices for long steel products by USD 14 per ton for domestic sales between September 21-30.
Steel mills are also reportedly restocking iron ore ahead of public holidays from October 1-7, which is expected to support iron ore prices in the near term.
On the Dalian Commodity Exchange, the most-traded iron ore contract jumped 4.64pct to 699.5 yuan (USD 99.1) per ton. Coke and coking coal futures also recorded significant gains, rising 3.94pct to 1,925 yuan (USD 273) and 3.33pct to 1,303 yuan (USD 185) per ton, respectively.
Steel futures saw sharp increases as well. On the Shanghai Futures Exchange, rebar futures rose 3.21pct to 3,217 yuan (USD 456) per ton, while HRC futures climbed 3.48pct to 3,300 yuan (USD 468) per ton. Wire rod futures were up 2.81pct to 3,549 yuan (USD 503) per ton, and stainless steel futures gained 0.76pct to 13,295 yuan (USD 1,885) per ton.
1 USD / 7.05 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,549 |
2.81 |
2.31 |
| HRC | 3,300 |
3.48 |
4.03 |
| Rebar | 3,217 |
3.21 |
4.04 |
| Stainless Steel | 13,295 |
0.76 |
1.39 |
| Iron Ore | 699.5 |
4.64 |
5.86 |
| Coke | 1,925 |
3.94 |
5.84 |
| Coking Coal | 1,303 |
3.33 |
5.56 |
