Iron ore and other raw materials, along with steel futures, posted sharp gains during pre-holiday trading on Monday, driven by Beijing’s latest stimulus measures that have improved market sentiment and the outlook for the steel sector.
On Sunday, China’s central bank adjusted the pricing mechanism for mortgage rates as part of broader efforts to stabilize the real estate sector. This policy adjustment is also expected to boost consumption, adding to the optimistic market sentiment. These steps are part of a comprehensive stimulus package introduced last Tuesday, which includes interest rate cuts, increased liquidity for banks, and support for stock markets.
In response to the central government’s housing market stimulus, major cities such as Shanghai, Shenzhen, and Guangzhou have relaxed homebuying restrictions and lowered minimum down payment requirements.
The market is hopeful for additional stimulus following recent factory data from China. The official manufacturing Purchasing Managers’ Index (PMI) for September came in at 49.8, up from 49.1 in August, according to the National Bureau of Statistics. Meanwhile, the Caixin PMI, which focuses more on export-oriented and small to medium-sized enterprises, fell to 49.3 in September from 50.4 in August. A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction. The differences between the official and Caixin PMIs stem from variations in their sample compositions; the official PMI includes larger state-owned enterprises, while Caixin’s covers smaller, private businesses.
Chinese futures markets will be closed from October 1 to 7 for National Day celebrations.
On the Dalian Commodity Exchange, the most-traded iron ore contract surged 10.71pct to 821.5 yuan (USD 117.1) per ton. Coke and coking coal futures also saw significant increases, both rising by nearly 11pct to 2,257 yuan (USD 322) and 1,546 yuan (USD 220) per ton, respectively.
On the Shanghai Futures Exchange, rebar, HRC, and wire rod futures rose by 7pct, reaching 3,551 yuan (USD 506), 3,643 yuan (USD 519), and 3,639 yuan (USD 519) per ton, respectively. Stainless steel futures gained 3.61pct to 13,930 yuan (USD 1,986) per ton.
1 USD / 7.01 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,639 |
7.00 |
5.19 |
| HRC | 3,643 |
6.99 |
5.85 |
| Rebar | 3,551 |
6.99 |
5.91 |
| Stainless Steel | 13,930 |
3.61 |
3.27 |
| Iron Ore | 821.5 |
10.71 |
8.70 |
| Coke | 2,257 |
10.99 |
8.95 |
| Coking Coal | 1,546 |
10.98 |
9.31 |
