Dalian iron ore futures extended their gains as concerns regarding a tepid economic recovery and disappointing economic data heightened expectations of stimulus to propel the economy.
The fragile state of China’s manufacturing sector and the overall economic recovery was underscored by a sharp decline in factory gate prices. In May, China’s producer price index (PPI) fell for the eighth consecutive month, dropping by 4.6pct, marking the fastest pace of decline in seven years, as reported by the National Bureau of Statistics (NBS).
Support for the iron ore and steel futures markets was also derived from reduced iron ore inventory at Chinese ports, as well as a decline in steel inventory at trader warehouses.
The September contract for iron ore on the Dalian Commodity Exchange surged by 3.44 pct, reaching 812 yuan (USD 113.9) per ton.
Coke and coking coal futures increased by 2.32 pct and 1.26 pct, respectively, to 2,076.5 (USD 291) per ton and 1,289 (USD 181) per ton.
Rebar futures grew by 1.62 pct to 3,711 (USD 521) a ton, HRC futures rose 1.95 pct to 3,823 (USD 536.5) per ton and wire rod futures increased by 3.17 pct to 4,134 (USD 580) per ton. Stainless steel futures saw a slight uptick of 0.16pct, reaching 15,190 (USD 2,132) per ton.
1 USD / 7.12 yuan
