Iron ore futures rose for a second day as China’s key steel hub eased some virus controls and the nation’s pledge to boost infrastructure spending aided demand prospects.
The raw material traded near $140 a ton in Singapore, recouping further losses after falling almost 10% Monday on concerns over the impact of China’s worsening Covid outbreak. The consumption outlook took a brighter turn after some areas in Tangshan city, including Caofeidian, lifted a lockdown and allowed the gradual reopening of firms, while President Xi Jinping vowed to spur infrastructure construction.
The Covid flareups in China have wreaked havoc on consumer spending and the supply chain. Regions making up a third of the nation’s economy expanded slower than the national growth rate in the first quarter. For steel mills, procurement costs for iron ore, scrap steel and coal have all edged up in March, the top industry body China Iron & Steel Association said in a WeChat post.
“Market sentiment has improved but the Covid impact on downstream demand still needs to be closely monitored,” Holly Futures wrote in a note, adding that the destocking of iron ore inventories at ports seems to be continuing.
Iron ore futures in Singapore rose 0.2% to $139.55 a ton by 11:06 a.m. local time, while prices in Dalian jumped 1.6%. Steel rebar and hot-rolled coil gained in Shanghai.
