Iron ore futures prices remained within a narrow range on Thursday as investors reassessed the likelihood of additional stimulus from China, the top consumer, in the second quarter to support its economy in light of recent soft data.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) concluded morning trade 0.55% higher at 820 yuan ($113.33) per metric ton, while the benchmark May iron ore on the Singapore Exchange remained flat at $106.7 per ton as of 0330 GMT.
China’s latest data revealed that the consumer price index (CPI) grew 0.1% in March from a year earlier, but experienced a 1.0% decline on a month-on-month basis. Additionally, the producer price index (PPI) recorded a 2.8% decrease in March from a year earlier, widening from a 2.7% slide in the previous month.
Analysts at Hongyuan Futures noted that the persistent “expectation of improved consumption amid rising hot metal output and lingering cost competitiveness against steel scrap” has been supporting iron ore prices. Furthermore, some steelmakers have accelerated production in response to improving downstream demand and steel margins, according to analysts at Citic Futures.
On the DCE, other steelmaking ingredients, such as coking coal and coke, experienced price gains, while steel benchmarks on the Shanghai Futures Exchange also saw upward movements.
Cheng Peng, an analyst at Sinosteel Futures, emphasized that the recent price increase in the market is largely influenced by macroeconomic factors and reflects a sentiment-driven rebound. He highlighted the significance of downstream demand recovery in determining the duration of the rebound.