Iron ore
futures rose on Thursday, with the Dalian benchmark contract touching a
two-week high, underpinned by increased construction activity in top steel
producer China and sustained policy support for the sector.
Iron
ore also remained supported by restocking demand ahead of China’s Golden Week
holiday beginning Oct. 1, analysts said.
Rebar
prices held firm near a four-week high.
The
most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime
trade 0.8% higher at 722.50 yuan ($100.38) a tonne, after hitting a Sept. 15
high of 731 yuan earlier.
On
the Singapore Exchange, the steelmaking ingredient’s most-active October
contract was up 1.1% at $95.90 a tonne, as of 0700 GMT.
Steel
inventories in China have fallen, reflecting improving domestic demand, though
it also indicated reduced output, ANZ commodity strategists said in a note.
China
has distributed an additional 300 billion yuan ($42 billion) allocated for
infrastructure projects through three state policy banks as of Wednesday, the
official Securities Times reported.
The
increased funding is among measures rolled out to shore up a domestic economy
that has been hit hard by COVID-19 restrictions and property-sector troubles.
But
caution was expected to dominate the market ahead of the holidays and next
month’s congress of China’s ruling communist party.
“Any
signs that it will maintain strict virus controls could see the outlook for
construction activity remain subdued for the foreseeable future,” ANZ said.
Rebar
on the Shanghai Futures Exchange rose 0.1%, hot-rolled coil slipped 0.2%, and
stainless steel SHSScv1 climbed 0.4%.
Dalian
coking coal DJMcv1 shed 0.5%, while coke gained 0.4%.
Worries
about a weakening yuan also eased, with the state-owned Securities Times saying
in a front-page commentary on Thursday that a rapid depreciation was unlikely
to continue.