China copper smelters plan to cut output after margins fall
The output cuts underscore the industry’s struggle with a shortage of feedstocks caused by recent mine production setbacks.
Iron ore futures climbed more than 3% on Friday, with Dalian prices hitting their highest in 17 months and stretching gains for the week on continued optimism about demand prospects in top steel producer China.
After bottoming out in October, iron ore prices have also U-turned, being one of the biggest gainers in the commodities complex from China’s sudden shift away from its “zero-covid” strategy and policy support for its ailing property sector.
Global supply concerns are also boosting iron ore prices, with analysts citing weather-related disruptions in Brazil and potential cyclones in Australia – the world’s biggest exporters of the steelmaking ingredient – and first-quarter mine maintenance programs.
Iron ore’s most-traded May contract on China’s Dalian Commodity Exchange ended daytime trade 3.4% higher at 881 yuan ($130.96) a tonne, after earlier touching its highest since August 2021 at 883 yuan.
On the Singapore Exchange, benchmark February iron ore climbed as much as 3.5% to $126.40 a tonne, its highest since last June.
While China faces challenges in the first quarter from high covid-19 infection rates, “growth prospects will improve from the second quarter, helped by the rebound in domestic consumption, further stabilization in the real estate market and supportive monetary and fiscal measures,” UOB Bank economists said in a note.
Chinese authorities will in the near-term issue further policies to support the rental housing market, which will include a 100 billion yuan plan to support rental housing loans, the official Xinhua news agency reported on Friday.
Chinese steel benchmarks and other Dalian steelmaking ingredients also rose, as traders looked past uninspiring late-2022 China economic data released this week.
Coking coal and coke rose 1.9% and 1.6%, respectively.
Rebar on the Shanghai Futures Exchange was up 1.1%, hot-rolled coil gained 0.9%, wire rod climbed 0.4%, and stainless steel added 0.7%.
(By Enrico Dela Cruz; Editing by Sherry Jacob-Phillips)
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