Iron ore rises on China demand optimism

NEW DELHI: Iron ore futures rose on Tuesday, as resilient demand and improved prospects in top consumer China continued to support the market.
 

Iron ore futures saw a boost in response to resilient demand and positive developments in China, the world's leading consumer of the commodity. The most-traded September iron ore contract on China’s Dalian Commodity Exchange surged by 1.7%, closing at 908 yuan ($125.47) per metric ton. Similarly, the benchmark June iron ore on the Singapore Exchange rose by 1.9% to $120.4 a ton.

China's recent measures to address its crisis-hit property sector, including the injection of 1 trillion yuan ($138 billion) in extra funding and easing mortgage rules, contributed to market optimism. However, experts like Atilla Widnell, managing director at Navigate Commodities, caution that while these measures may support house prices and alleviate value destruction from excess inventory, they may not single-handedly revive construction activity and steel demand.

Weak steel mill margins in China are also impacting prices of steelmaking raw materials, according to ANZ Research. While coking coal saw a slight increase of 0.1%, coke slipped by 0.1%. Steel benchmarks on the Shanghai Futures Exchange showed mixed results, with rebar and hot-rolled coil seeing gains of 0.4% and 0.3% respectively, while stainless steel rose by 0.4% and wire rod slipped by 0.1%.