Iron ore surged more than 7% in Singapore amid demand optimism on expectations that China will move to increase stimulus next year to bolster the economy. Prices also jumped in Dalian.
Futures on the SGX extended a stretch of four weekly gains, the longest winning run since May, and headed for the highest close since late October. Economists predict the country will start adding fiscal stimulus in early 2022 after top officials said their key goals for the coming year include counteracting growth pressures and stabilizing the economy, even though curbs on property are expected to remain.
At the end of a three-day annual Central Economic Work Conference, the Communist Party’s leading decision makers on Friday said the top priority for next year is “ensuring stability.” They also vowed to “front load” policies and keep the monetary stance flexible and appropriate.
“The focus of the market recently is back on the policy side,” according to Huatai Futures. “While weak property data have dragged down the ferrous metals market, the outlook for next year is not that pessimistic based on the overall ‘stability’ goal in China.”
Iron ore has been on a tumultuous ride this year as a slew of output and pollution curbs hit consumption and turmoil in the property industry damped construction activity. The steel-making ingredient has roughly halved from its peak in May, though it has been supported recently by improved demand.
Iron ore futures in Singapore soared as much as 7.2% to $116.15 a ton and traded at $115.30 by 3:30 p.m. Dalian prices closed 4.5% higher. Steel rebar and hot-rolled coil climbed at least 2.1% in Shanghai.
