Iron ore rallied to the highest level in more than five weeks, extending its rebound on hopes for stronger Chinese demand.
Futures in Singapore advanced as much as 1.9% to $121.95 a ton, before trading at $121.90 by 4:09 p.m. local time, building on a gain of over 6% last week. Vale SA, one of the top iron ore producers, said there were upside risks to prices after China’s government clearly signaled support for infrastructure activity.
The iron ore market is very balanced, and there’s no supply increase coming from any region, the Brazilian company’s executive vice president of iron ore solutions, Marcello Spinelli, said in a conference call.
There’s more optimism across China’s markets after recent measures from Beijing to support the economy, including the issuance of 1 trillion yuan of sovereign debt. The additional fiscal stimulus will focus on infrastructure spending, Bloomberg Intelligence wrote in a note.
Traders were also assessing the risk of industrial action by BHP Group’s train drivers in the Pilbara region of Western Australia. A union representing about 500 workers voted in favor of a strike for better working conditions, although any action will not be immediate.
