Nornickel weighs projects in new top market China
Nornickel executives held talks with potential Chinese partners this month and signed about 10 memorandums of understanding, Bloomberg sources say.
Iron ore futures rose on Wednesday, with the Dalian benchmark contract hitting a two-week high, as a looming bond financing support for property developers in China added fuel to the steelmaking ingredient’s sentiment-driven rebound.
After a rout in October on worries about weakening steel demand in top producer China mainly due to covid-19 curbs and a property sector downturn, iron ore has regained some strength this month.
Initially supported by speculations about China relaxing its strict covid restrictions, iron ore’s gains widened after the self-regulatory body of China’s interbank market said on Tuesday it will expand bond financing for private firms, including developers, with support from the central bank.
Shares of Chinese real estate developers soared following the news.
The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade 2.6% higher at 686 yuan ($94.62) a tonne, after touching its strongest since Oct. 24 at 691.50 yuan.
On the Singapore Exchange, benchmark December iron ore was up 0.8% at $88.55 a tonne, as of 0705 GMT.
“With headlines such as China expanding financial tools to support developers … it is not difficult to see why sentiment has been positive,” said Zenon Ho, analyst at commodities broker Marex.
Other Dalian steelmaking inputs also extended gains, with coking coal and coke up 1.7% and 2.3%, respectively.
On the Shanghai Futures Exchange, rebar rose 1.5%, wire rod climbed 0.5%, hot-rolled coil advanced 1.8%, and stainless steel gained 0.2%.
However, doubts remained whether gains in the ferrous complex could be sustained given concerns about surging new covid-19 cases in China, which has reaffirmed its zero-covid policy.
Iron ore demand in China is also expected to remain sluggish as negative steel margins have prompted some mills to limit production, and with the usual winter steel output curbs looming.
(By Enrico Dela Cruz; Editing by Sherry Jacob-Phillips)
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