Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Iron Ore Jumps as Bets on Economic Recovery Fuel Demand Optimism

Published 08/24/2021, 06:36 AM
Updated 08/24/2021, 09:18 AM
© Reuters.  Iron Ore Jumps as Bets on Economic Recovery Fuel Demand Optimism

© Reuters. Iron Ore Jumps as Bets on Economic Recovery Fuel Demand Optimism

(Bloomberg) -- Iron ore surged on expectations a recovery in economic growth, including additional support from the Chinese government, will boost demand for steel. 

Futures in Singapore rebounded as much as 10% as a potential boost to the U.S. vaccination drive lifted sentiment across assets from stocks to base metals. Separately, China’s central bank chief vowed to stabilize the supply of credit and boost the amount of money supporting smaller businesses and the real economy after both credit and economic growth slowed in July. 

In China, “people are hoping for some further stimulus targeting the infrastructure sector, as real estate and manufacturing are looking bleak,” said Erik Hedborg, principal analyst at CRU Group. “In the rest of the world, we are seeing steel production stabilizing at levels below pre-pandemic levels.”

Iron ore has had a spectacular collapse, losing about a quarter of its value in the past month, as China’s push to reduce steel production hammered demand. Iron ore stockpiles at the country’s major ports expanded 1.3% last week, signaling a softening in consumption, while steel output fell in July. 

Market watchers have pointed to more volatility to come amid a complex policy backdrop in China, as well as an uneven global recovery.

Iron ore in Singapore was up 10% at $149.65 a ton by 11:35 a.m. London time, after falling 2.1% on Monday. Futures in Dalian closed 8% higher. Rebar and hot-rolled coil climbed over 2.5% in Shanghai.

©2021 Bloomberg L.P.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.