CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Iron ore futures ended a volatile year firmer on Friday, with the Dalian benchmark settling near a more than six-month high, propelled by optimism around top steel producer China’s unwinding of pandemic controls and economic support measures.
Spot prices of the steelmaking ingredient also rallied this week, scaling a five-month peak as traders brushed aside concerns about surging covid-19 infections across China. But it was set to mark its weakest year-end finish in three years.
The most-traded May iron ore on China’s Dalian Commodity Exchange ended the session up 2.8% at 863 yuan ($124.14) a tonne, after earlier hitting 867.50 yuan, its strongest since June 9. It posted an annual gain of 43%.
On the Singapore Exchange, iron ore’s benchmark January contract closed 1.8% higher at $117.20 a tonne, near a five-month high of $117.35.
Spot 62%-grade iron ore jumped to $116 a tonne on Thursday, the highest since early August, SteelHome consultancy data showed.
Iron ore scaled this year’s peak at $163 in March driven by China’s easing of pandemic restrictions and policy support for its slowing economy. It collapsed to $80 levels in November, dragged down by Beijing’s draconian “zero-covid” policy and a property sector downturn.
“Iron ore is expected to remain strong in the near term (rising to $120/t) and could follow through (rally up to $150/t) in the bull case of a major China credit easing during 1Q’23 and an accelerated China re-opening plan materializing,” Citi analysts said.
Other Dalian steelmaking inputs ended the session slightly lower, with coking coal and coke down 0.2% and 0.3%, respectively, while steel benchmarks also rose.
Rebar on the Shanghai Futures Exchange rose 1.8%, hot-rolled coil climbed 1.7%, and wire rod gained 0.3%. Stainless steel edged up 0.1%.
Night trading on Friday in Dalian and Shanghai has been cancelled, and both bourses will remain closed on Monday, Jan. 2 for the New Year break. Trading will resume on Tuesday, Jan. 3.
(By Enrico Dela Cruz; Editing by Krishna Chandra Eluri and Louise Heavens)
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