Iron ore futures on the Dalian and Singapore exchanges rose on Thursday (3), driven by growing expectations of improving demand for steel raw material in China, after reports of a possible easing of Covid-19 restrictions. in the world’s largest steel producer.
The most-traded iron ore contract in Dalian ended day trading up 6.8% at 797.50 yuan ($126.27) a tonne after rising 9.7%, its highest level since 11 of February.
On the Singapore Stock Exchange, iron ore for April was up 6.20% to $158.35 a tonne after hitting a contract high of $162.40 earlier in the day.
“China’s entire ferrous futures complex is zealously reacting to reports that the country is considering moving out of its ‘zero tolerance’ stance on Covid-19,” said Atilla Widnell, director of Navigate Commodities in Singapore.
“Fewer intermittent lockdowns will support China’s quest to get the economy back on track.”
But it is still too early for China to consider easing its strict restrictions on the coronavirus, with the highly infectious Omicron strain still capable of causing a large number of deaths, said the head of a group of experts on Covid-19 prevention.
On the spot market, imported iron ore traded at $154 a tonne on Thursday, the highest since Aug 31, 2021, according to data from consultancy SteelHome.
Chinese steel and other steel ingredient futures also extended their rally, rebounding after market regulators last month tried to stem rising prices for iron ore and coal in particular.
Chinese officials have pledged to avoid “excessive hoarding” of iron ore and ensure traders bring stocks back to a reasonable level.
On the Shanghai Futures Exchange, hot rolled coil rose 2.6%. Construction steel rebar gained 0.6%, while steel advanced 4.8%.
Dalian metallurgical coal rose 4.2% and coke rose 3.4%.
Source: CNN Brasil
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