Iron ore futures rallied on Wednesday to their highest in multiple months, boosted by hopes of improving demand in top consumer China following Beijing’s pledge of easing monetary policy this year.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! closed daytime trade 4.09% higher at 828 yuan ($118.46) a metric ton, its highest since July 23.
The benchmark February iron ore (SZZFG6) on the Singapore Exchange was 2.47% higher at $109.1 a ton as of 0822 GMT, touching its highest since February 21.
China’s central bank said on Tuesday that it would cut the reserve requirement ratio and interest rates in 2026 to keep liquidity ample, and continue to implement appropriately loose monetary policy.
Hopes of rate cuts by Beijing in coming months boosted broad sentiment in the ferrous market, underpinning price rallies across the market, said analysts.
Supporting prices of the key steelmaking ingredient was also the expectation of a raft of restocking by Chinese steel mills with low in-plant inventory ahead of the Lunar New Year in February.
Other steelmaking ingredients on the DCE likewise surged, with coking coal NYMEX:ACT1! and coke (DCJcv1) both up by nearly 8% to hit their exchange-permitted limits.
“The jump in coal prices was mainly fueled by rotation of funds and improved macro sentiment amid positive signs on policies,” said Guo Chao, a Shanghai-based analyst at broker Galaxy Futures.
“The relatively low valuation of coking coal has appealed to investors.”
Expectations of potential supply constraints in China also led to the price rally, said analysts.
Coking coal is a feedstock for coke.
Steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar RBF1! rose 2.87%, hot-rolled coil EHR1! strengthened 2.52%, and wire rod (SWRcv1) firmed 0.92%.
Stainless steel HRC1! also hit its maximum limit, with a rise of 4.99% against the backdrop of a price surge of raw material nickel.
Source: Reuters
