Iron ore rebounds as China central bank governor’s speech lifts sentiment
IRON ore prices recovered on Wednesday (Nov 8) as sentiment was boosted following a speech by China’s central bank governor on support for the property market, the country’s biggest steel consuming sector.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 1.03 per cent higher at 935 yuan (S$174.47) a metric ton.
The benchmark December iron ore on the Singapore Exchange was 1.09 per cent higher at US$124.4 a ton, as of 0736 GMT, the highest since Apr 3.
Pan Gongsheng, China’s central bank governor, said spillover effect of property market adjustments on the financial system are generally manageable and will guide financial institutions to keep stable financing channels open through property credit and bonds, state media reported.
Sentiment was also bolstered following a Reuters report that Chinese authorities have asked Ping An Insurance Group to take a controlling stake in embattled Country Garden, the nation’s biggest private property developer.
Ping An denied to have been approached by the government.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Prices shrugged off earlier losses due to lingering risk-off sentiment.
“Fears of enhanced government supervision on the market weighed on prices, especially after latest moves made by the Dalian bourse,” said Chu Xinli, a Shanghai-based analyst at China Futures.
The DCE announced on Monday it would limit trading volumes and adjust up trading fee rates for some futures contracts of the key steelmaking ingredient.
“More production cuts might not be seen amid improved steel margins, indicating ore demand won’t shrink significantly in the near term, supporting prices,” Chu added.
Other steelmaking ingredients on the DCE also posted gains, with coking coal and coke up 2.43 per cent and 1.41 per cent, respectively.
Higher raw materials prices drove up steel benchmarks on the Shanghai Futures Exchange. Rebar added 1.29 per cent, hot-rolled coil rose 1.18 per cent, wire rod climbed 0.57 per cent.
Stainless steel fell 0.89 per cent. REUTERS
Share with us your feedback on BT's products and services
