The most-traded September iron ore on China’s Dalian Commodity Exchange ended morning trade 2.4% higher at 722 yuan ($104.45) a tonne.
It earlier touched 727.50 yuan, its highest since April 27. On the Singapore Exchange, however, the steelmaking ingredient’s benchmark June contract was down 2.3% at $103.05 a tonne, following a 7% intraday gain on Monday.
Expectations for fresh stimulus to support China’s economy have grown amid a patchy recovery despite the lifting of tough COVID restrictions.
China’s trade data for April, released on Tuesday, added to a challenging outlook for its economy, with exports growing at a markedly slower pace versus March.
“We expect commodity markets to remain reactive to any signs of policy support. That should keep iron ore prices volatile in the short term,” Commonwealth Bank of Australia analyst Vivek Dhar said in a note.
Monday’s iron ore gains came amid speculation about new rules governing state-owned enterprises’ bond issuances, and as China’s housing regulator ordered real estate brokers to reduce transaction and leasing service fees to support the property sector. Any outlook on China’s steel demand will have to incorporate a view on its property sector, the main driver of expansion in domestic steel consumption in recent years, analysts said.
