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China's economy shows gradual recovery after reopening
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PBOC ramps up fund injection via medium-term policy loans
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China Jan-Feb crude steel output up 5.6% year-on-year
(Updates prices)
By Enrico Dela Cruz
March 15 (Reuters) - Benchmark iron ore futures held
ground on Wednesday as China's activity data in January and
February pointed to an economic rebound, albeit gradual, for the
world's top steel producer.
China's central bank ramped up liquidity injections when
rolling over maturing medium-term policy loans for a fourth
month in a row, which also lent support to ferrous futures.
The People's Bank of China's move followed data last week
showing unexpectedly strong credit growth for February, as
Beijing looks to support economic recovery.
The most-traded May iron ore on China's Dalian Commodity
Exchange ended daytime trade steady at 926.50 yuan
($134.48) a tonne, near the contract's record high of 936 yuan.
On the Singapore Exchange, the steelmaking ingredient's
benchmark April contract was up 0.4% at $132.20 a
tonne, as of 0707 GMT.
China's economic activity picked up in the first two months
of 2023 as consumption and infrastructure investment drove
recovery from pandemic disruption, despite challenges of weak
global demand and a persistent downturn in the property sector.
China's crude steel output for the two-month period
increased 5.6% as mills ramped up production in anticipation of
a further boost in demand, with domestic construction activity
expected to pick up in the second quarter.
"The overall consumption of steel products has shown an
unexpected growth, which has greatly improved market
confidence," Huatai Futures analysts said in a note.
Rebar on the Shanghai Futures Exchange shed a
modest 0.9%, after scaling a nine-month peak in the previous
session, while hot-rolled coil dropped 0.6%. Wire rod fell 1.5%, but stainless steel added 0.4%.
On the Dalian exchange, coking coal and coke slumped 3.9% and 2.6%, respectively.
China's demand for Australian coking coal remains lacklustre
even after Beijing removed import restrictions, as supplies from
local mines, Mongolia and Russia are cheaper, traders say.
(Reporting Enrico Dela Cruz in Manila; Editing by Rashmi Aich
and Varun H K)
