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Dalian iron ore climbs 5%, SGX iron ore leaps 7%
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Steel benchmarks, other steel inputs also rally
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Hopes for more China stimulus buoy ferrous markets
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Tangshan steel output curbs add support to prices
(Recasts, adds trader comment)
By Enrico Dela Cruz
May 8 (Reuters) - Iron ore futures rebounded strongly on Monday, with the Singapore
benchmark climbing back above $100 a tonne after a downbeat start to the week, buoyed by
expectations of improved fundamentals in the steel market.
Steelmakers in Fengnan district of Tangshan city, China's top steel-producing hub, have been
officially required to roll out a reasonable annual production plan, and make greater efforts to
limit this year's output at not more than the 2022 level, according to an official document seen
by Reuters.
"This is the first time that a regional government made it clear its stance on this year's
steel output cut policy. And this might be just a start, driving steel prices up and boosting
upstream iron ore as well," said a Beijing-based iron ore trader.
Meanwhile, hopes of improvement in demand for steel in China also provided some boost.
Expectations for fresh stimulus measures have grown following a surprise contraction in China's
manufacturing PMI and a slowing growth momentum for service activity in April, which provided
further evidence of an uneven recovery for the world's No. 2 economy and biggest steel producer.
"Disappointing construction, manufacturing, and now even services PMI will have given the
government serious cause for concern," Navigate Commodities managing director Atilla Widnell
said.
China's housing regulator, for one, has tightened governance of real estate agents by
ordering them to lower commissions, which Widnell said was a move that could be construed as an
attempt to support the struggling domestic property sector.
Iron ore's most-traded June contract on the Singapore Exchange rose as much as 7%
to $105.70 a tonne, after shedding 1.7% to $97.05 earlier in the session.
On China's Dalian Commodity Exchange, the steelmaking ingredient's benchmark September
contract ended daytime trade 5% higher at 721.50 yuan ($104.33) a tonne, regaining some ground
after hitting a five-month low on Friday.
Rebar on the Shanghai Futures Exchange rose 4.2%, hot-rolled coil climbed
5.1%, and stainless steel gained 0.9%.
Coking coal and coke on the Dalian exchange also reversed early losses,
advancing by 6.8% and 6.3%, respectively, supported by expectations of reduced coal supply from
Mongolia, according to analysts.
(Reporting by Enrico Dela Cruz in Manila; Additional reporting by Amy Lv in Beijing; Editing by
Sherry Jacob-Phillips, Sohini Goswami and Shailesh Kuber)
