The iron ore price pushed higher on Thursday on expectations of further monetary easing measures in China, while stainless steel futures jumped to a three-month peak, buoyed by record-high prices of key ingredient nickel.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $134.72 a tonne during morning trading, up 2.3% compared to Wednesday’s closing, the highest since September 7, 2021.
China stepped up its monetary easing efforts to prop up a slowing economy this week by lowering a set of key policy rates and lending benchmarks, with markets expecting further moves.
“We view this week’s rate cuts as a pre-emptive move to drive a growth rebound in 2022,” said Commonwealth Bank of Australia commodity analyst Vivek Dhar, citing downside pressures from the reimposition of covid-19 curbs and the property sector’s downturn.
Mysteel estimates that utilization rates of blast furnaces will drop to about 55% in the key steel-making hub of Tangshan in China in February and March. It also expects rates to fall in the Shandong and Henan provinces.
Apart from China’s stimulus measures, Dhar said improved steel margins also supported iron ore prices.
