Iron ore extends gains above $140 on optimism for China demand

Iron ore in Singapore rose 0.7% to $143.75 a ton as of 11:48 a.m. local time, to head for its highest close in a month.
Image: Ian Waldie/Bloomberg

Iron ore topped up its biggest weekly gain in 13 weeks as traders tracked China’s moves to rein in Covid-19 restrictions that have weighed on steel demand this quarter.

Futures in Singapore crept higher on Monday morning after surging more than 7% last week on optimism over China’s plans to get the economy moving again after sweeping lockdowns.

Beijing authorities said the capital will resume public transport in most districts, restart dine-in restaurant services and allow workers to return to offices. This comes after the city achieved zero new community cases in most of its 16 districts.

The steel-making ingredient shot through $140 a ton last week after spending most of May fluctuating around $130 a ton. Investors are tracking what’s next for demand after a terrible period for construction and manufacturing activity. There’s expectations for more infrastructure spending.

In a positive sign, iron ore inventories at major ports plunged to their lowest levels for the year, reaching an eight-month low, according to Steelhome data. And steelmaking margins are expanding again after shrinking to a 15-month low in May.

Still, investors will likely await firmer signs that China’s cities won’t move back into lockdowns again given the country’s Covid Zero policy. And any production curbs on steel will also be monitored after an earlier pledge for output to drop again this year, Baocheng Futures wrote in a note.

Iron ore in Singapore rose 0.7% to $143.75 a ton as of 11:48 a.m. local time, to head for its highest close in a month. Futures in Dalian climbed 1.1% after a trading pause for a public holiday on Friday. Steel rebar and hot-rolled coil futures advanced in Shanghai.

© 2022 Bloomberg

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

SEARCH COMPANIES
Enter company name or share code:

ECONOMIC DATA  

  CPIThe Consumer Price Index (CPI) measures monthly changes in prices for a range of consumer products Jun 2022 6.50%
  CPI ex OERThe Consumer Price Index excluding Owners’ Equivalent Rent (CPI ex OER) measures monthly changes in prices for a range of consumer products excluding Owners’ equivalent rent that measures changes in the cost of owner-occupied housing Jun 2022 6.90%
  RepoThe rate at which the Reserve Bank lends money to the country’s commercial banks and set by the Reserve Bank’s Monetary Policy Committee. Jul 2022 4.75%
  Prime lendingThe Prime Lending Rate is the rate of interest that commercial banks will charge their clients when issuing a loan (home loan or vehicle finance) Jul 2022 8.25%

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: