Iron ore futures edged higher on Monday as top consumer China’s latest pledge to roll out a package of polices to spur domestic consumption lifted sentiment.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.92% higher at 822.5 yuan ($117.92) a metric ton.
The benchmark February iron ore on the Singapore Exchange was up 0.68% at $109.2 ton as of 07:00 GMT.
China’s cabinet held a meeting on Friday about implementing a package of fiscal and financial policies to boost domestic demand, including initiatives to spur household consumption, state broadcaster CCTV reported.
A need for restocking as well as decreasing global iron ore shipments from Australia and Brazil also lifted prices.
Iron ore inventories at 247 steel mills are lower compared to levels measured during the same period in past years, according to consultancy Mysteel, indicating there is still some room left to spur demand.
The restocking momentum is boosted further by a rebound in average daily pig iron output to 2.3 million tons.
Global iron ore shipments from Australia and Brazil totalled 26.064 million tons, a 1.36 million ton decrease compared to last week, according to data from Mysteel released on January 12.
Other steelmaking ingredients on the DCE gained, with coking coal and coke up 4.21% and 1.35%, respectively.
Coking coal fundamentals have not changed significantly, and the sharp rise in prices was compounded by last-week’s bullish market sentiment for iron ore, according to broker Galaxy Futures.
Steel benchmarks on the Shanghai Futures Exchange mostly firmed. Rebar gained 0.6%, hot-rolled coil grew 0.55% and stainless steel rose 1.21%. Meanwhile, wire rod lost 1.23%.
($1 = 6.9750 yuan)
(By Ruth Chai; Editing by Ronojoy Mazumdar and Sonia Cheema)
