The iron ore price surged on Thursday, buoyed by growing hopes of improved demand in China after reports of a possible easing of covid-19 curbs in the world’s top steel producer.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $153.33 a tonne during morning trading, up 5.8% compared to Wednesday’s closing.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange ended daytime trading 6.8% higher at 797.50 yuan ($126.27) a tonne, after soaring as much as 9.7% to its highest since February 11.
“The whole China ferrous futures complex is reacting zealously to reports that the country is contemplating exiting its ‘zero-tolerance’ stance towards covid-19, for which the ‘stop/start’ impact on the economy has been a heavy burden,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.
But it is still too early for China to consider easing its stringent coronavirus restrictions, with the highly infectious omicron strain still capable of causing large numbers of deaths, said the head of an expert group on covid-19 prevention.
China plans to raise its equity output of iron ore in overseas mines to 220 million tonnes by 2025 as well as increase domestic raw material supplies, state-backed China Metallurgical News reported on Tuesday.
