Iron ore futures continued their upward trajectory on Friday, supported by expectations of additional stimulus measures.
China’s post-pandemic recovery has significantly slowed after a strong start in the first quarter, creating pressure on policymakers to implement new stimulus measures. The hopes for stimulus were further fueled by weak export data in June, with China experiencing its sharpest decline in exports since the onset of the COVID-19 pandemic three years ago.
However, analysts caution that any stimulus measures are likely to be limited due to the heavy debts, particularly in the struggling property sector. The property sector, which plays a significant role in steel demand, is burdened by substantial debts. The government recently provided support measures and indicated that more support is on the horizon.
Despite these developments, the steel market fundamentals remain uncertain due to adverse weather conditions, such as high temperatures and heavy rains in various parts of the country. As a result, there has been a rise in inventory levels of major finished steel products at Chinese warehouses.
At the Dalian Commodity Exchange, iron ore futures for the September contract witnessed a 2.54pct increase, reaching 849 yuan (USD 118.5). Similarly, Dalian coke and coking coal futures experienced gains of 1.98pct and 2.85pct respectively, with morning trades concluding at 2,219 yuan (USD 310) per ton and 1,425.5 yuan (USD 199) per ton.
Rebar futures rose by 1.59pct, settling at 3,774 yuan (USD 527) per ton, while HRC futures increased by 1.39pct, reaching 3,874 yuan (USD 541) per ton. Wire rod futures saw a 0.75pct increase, reaching 4,145 yuan (USD 579) per ton. Stainless steel futures remained relatively stable at 14,960 yuan (USD 2,089) per ton.
1 USD / 7.16 yuan
