SINGAPORE: 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) traded 0.61% higher at 820 yuan ($117.56) a metric ton as of 0241 GMT.
The benchmark February iron ore on the Singapore Exchange was 0.54% higher at $109.05 ton.
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 combination of decreasing shipments and a need for restocking also lent support to iron ore prices.
Australian and Brazillian shipments decreased by 1.74 and 1.43 million tons week-on-week respectively, according to data from consultancy Mysteel released on January 5.
Iron ore inventories at 247 steel mills are low compared to levels measured during the same period in past years, according to 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.
Other steelmaking ingredients on the DCE gained, with coking coal and coke up 2.4% and 0.37%, respectively. Coking coal fundamentals have not changed significantly, and the sharp rise in coking coal 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 firmed. Rebar gained 0.38%, hot-rolled coil grew 0.39%, wire rod strengthened 0.46% and stainless steel rose 0.95%.
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