Iron ore futures extended gains on Wednesday, aided by China’s better-than-expected credit data but the rise was capped by fears of escalating trade tensions after U.S. President-elect Donald Trump takes office next week.
Trump has pledged to impose a 60% tariff on Chinese goods.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.71% higher at 782.5 yuan ($106.73) a metric ton, after hitting the highest since Jan. 2 at 787.5 yuan a ton earlier in the session.
The benchmark February iron ore (SZZFG5) on the Singapore Exchange rose 0.26% to $100.6 a ton as of 0709 GMT after touching $101.15, the highest since Jan. 2, earlier in the day.
Chinese banks extended 990 billion yuan ($135.03 billion) in new loans last month, up from November 2024, outpacing analysts’ forecasts and boosting sentiment in the ferrous market.
Prices of the key steelmaking ingredient have gained around 4% so far this week on rising stimulus bets and strong steel trade data.
“The market also remains hopeful of further stimulus measure after recent comments from Vice Finance Minister Liao Min that China has sufficient fiscal firepower to respond to external challenges,” ANZ analysts said.
However, iron ore price gains were curbed on demand worries amid China’s lingering property woes and slowing economic growth due to possible tariff hikes from the U.S.
Country Garden, once China’s biggest developer and now facing a liquidation lawsuit, on Tuesday reported steep losses in its long-overdue 2023 and interim 2024 financial results.
China’s economic growth will likely slow to 4.5% in 2025 and cool further to 4.2% in 2026, a Reuters poll showed.
Other steelmaking ingredients on the DCE gained ground with coking coal and coke up 0.54% and 0.64%, respectively.
Steel benchmarks on the Shanghai Futures Exchange advanced. Rebar RBF1! rose 0.67%, hot-rolled coil EHR1! climbed 0.92% while wire rod (SWRcv1) nudged down 0.08% and stainless steel HRC1! dipped 0.15%.
Source: Reuters