Dalian iron ore futures rebound on Tuesday following the Chinese central bank’s decision to reduce a key short-term policy rate aimed at supporting the country’s sluggish post-pandemic recovery.
The People’s Bank of China (PBOC) cut its seven-day reverse repurchase rate by 10 basis points, lowering it from 2pct to 1.9pct. This marks the first rate adjustment of its kind since August 2022.
The seven-day reverse repo rate represents the short-term interest paid by the central bank on loans obtained from commercial lenders. A decrease in this rate is expected to boost the domestic money supply and stimulate spending.
In response to the PBOC’s move, the September contract for iron ore on the Dalian Commodity Exchange witnessed a 0.69pct increase, reaching 801.5 yuan (USD 112.1) per ton.
Additionally, coke and coking coal futures saw notable gains, rising by 2.64pct and 4.09pct respectively, with prices reaching 2,098 yuan (USD 294) per ton and 1,323.5 yuan (USD 185) per ton.
Rebar futures also experienced growth, climbing by 1.88pct to 3,741 yuan (USD 524) per ton. HRC futures rose by 1.77pct to 3,848 yuan (USD 539) per ton, and wire rod futures increased by 3.16pct to 4,248 yuan (USD 595) per ton. However, stainless steel futures showed a slight decrease of 0.56pct, reaching 15,200 yuan (USD 2,128) per ton.
1 USD / 7.14 yuan
