Iron ore futures rose on Wednesday to their highest levels in nearly two weeks, supported by China’s latest stimulus measures, although gains were capped by cautious sentiment around potential easing of U.S.-China trade tensions.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! closed daytime trade 0.35% higher at 708 yuan ($97.96) a metric ton.
The contract touched its highest since April 24 at 726 yuan a ton earlier in the session.
The benchmark June iron ore (SZZFM5) on the Singapore Exchange gained 0.61% to $98.1 a ton, as of 0700 GMT, after scaling a nearly two-week peak at $99.85 earlier.
Chinese authorities announced a raft of stimulus measures on Wednesday, including interest rate cuts and a major liquidity injection, as Beijing steps up efforts to soften the economic damage caused by the trade war with the United States.
“The magnitude of this round of stimulus somewhat beat our expectations and that’s the main driver for the price strength,” said a Singapore-based iron ore trader, requesting anonymity since he isn’t authorised to speak to the media.
But caution lingered despite positive signals for the potential easing of the global trade war.
U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s top economic official in Switzerland on Saturday, in what could be the first step toward resolving a trade war disrupting the global economy.
Steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar RBF1! added 0.19%, hot-rolled coil EHR1! rose 0.34% and stainless steel HRC1! nudged up 0.08%.
However, other steelmaking ingredients on the DCE posted losses, dragged down by weak fundamentals. Coking coal NYMEX:ACT1! and coke (DCJcv1) lost 0.77% and 0.66%, respectively.
Source: Reuters