Iron ore futures prices pared losses on Tuesday, helped by resilient near-term demand for the key steelmaking ingredient and renewed stimulus hopes in top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) managed to claw back above the psychological level of 800 yuan ($110.16) per metric ton, ending the daytime trade at 801 yuan per ton. Earlier in the session, the contract had touched an intraday and 11-week low of 791 yuan per ton.
The benchmark July iron ore on the Singapore Exchange also erased earlier losses, climbing 1.12% to $103.75 per ton as of 0734 GMT.
The rebound in iron ore prices was helped by hopes of more economic stimulus in China. Premier Li Qiang stated that the country is confident and capable of achieving its full-year growth target of around 5% and vowed to safeguard industrial stability.
A North China-based trader, speaking on condition of anonymity, said that despite the persistent price fall, some traders are still holding confidence in the market due to the remaining high hot metal output, which means that at least in the short term, ore demand will be firm.
Data from consultancy Shanghai Metals Market showed that hot metal output is likely to rise again this week.
Iron ore prices had fallen for three straight sessions previously, driven by seasonally weak steel demand, high portside inventories, and expectations of a steel output cut.