*
China central bank ramps up medium-term liquidity
*
Dalian, SGX iron ore rise, but remain range-bound
(Updates prices)
By Enrico Dela Cruz
Feb 15 (Reuters) - Dalian iron ore futures climbed on
Wednesday, while the Singapore benchmark price for the
steelmaking ingredient extended gains, following the Chinese
central bank's move to inject additional liquidity into the
banking system.
The People's Bank of China (PBOC), as expected, boosted
medium-term liquidity on Wednesday, with the operation resulting
in a net 199 billion yuan ($29.06 billion) of fresh fund
injection while keeping the interest rate unchanged.
Markets had hoped the PBOC would pump more cash into the
banking system after money conditions became unexpectedly tight
at the start of February and to support the economic recovery
after Beijing dismantled strict COVID-19 curbs.
The most-traded May iron ore on China's Dalian Commodity
Exchange ended daytime trade 2.2% higher at 865.50 yuan a tonne,
after hitting 873 yuan earlier.
On the Singapore Exchange, iron ore's benchmark March
contract was up 0.9% at $123.55 a tonne, as of 0717
GMT, off a session high of $124.30.
Most steel benchmarks on the Shanghai Futures Exchange and
other Dalian steelmaking inputs also advanced.
Rebar and hot-rolled coil both climbed
1.5%, while wire rod added 0.6%. Stainless steel slipped 0.1%.
Coking coal and coke rose 1.4% and 0.6%,
respectively.
The liquidity boost in top steel producer China followed an
increase in new bank loans in January to a record 4.9 trillion
yuan.
But analysts said Chinese ferrous commodities' prices may
remain range-bound as market fundamentals offer not much support
at the moment, with the country's iron ore port inventory at a
five-month peak and the optimism around Chinese steel demand
tempered by a subdued property market.
"Chinese demand is expected to be broadly flat with the
weakness in China's property market offset by a pick-up in
infrastructure," said Westpac senior economist Justin Smirk who
expects iron ore prices to settle at $100 a tonne by yearend.
($1 = 6.8481 Chinese yuan renminbi)
(Reporting by Enrico Dela Cruz in Manila; Editing by Rashmi
Aich and Janane Venkatraman)
