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Iron Ore Rises On Upbeat Chinese Industrial Data, Demand Hopes

Bruno T
Latest News
December 26 2023 11:44PM

Iron ore futures on the Dalian Commodity Exchange in China saw a rise for the second consecutive session on Wednesday, December 27. This increase is attributed to strong industrial data and expectations of economic stimulus, coupled with robust demand from China. The most-traded iron ore contract for May on the Dalian Exchange rose by 0.5% to reach 985.5 yuan (approximately S$182.3) per metric ton, marking a potential second consecutive year of gains.

Similarly, on the Singapore Exchange, the benchmark iron ore contract for January also experienced a 0.5% increase, closing at US$140.22 per metric ton.

This positive trend in the iron ore market is reflective of China’s industrial profits in November, which showed double-digit gains. This improvement in manufacturing, however, is still tempered by soft demand, leading to restrained business growth expectations and calls for further macroeconomic policy support.

In a move to stimulate the economy, China‚Äôs top planning body announced on Saturday the identification of a second batch of public investment projects. These projects are part of a bond issuance and investment plan initiated in October. Additionally, five of China’s largest state banks lowered interest rates on some deposits last Friday. This action suggests a potential reduction in lending costs, aligning with the government’s efforts to encourage banks to support the economic landscape.