Iron ore leads metals higher on hopes for more China stimulus

Iron ore led metals higher with the key steelmaking material rising from its lowest close in a week and a half as investors mulled what China might do next to bolster its economy.

After swinging between gains and losses since Monday, iron ore is on course for a modest weekly drop. Muted steel demand during the peak-construction season is a key headwind, according to ANZ Group Holdings Ltd., which sees prices “finding a floor” near $95 a ton.

There are still hopes that China, the biggest metals consumer, will announce more measures to spur growth. The People’s Bank of China’s implemented a surprise rate cut last week, but the call for more measures is growing. State-run media ran front-page articles Wednesday saying the central bank is likely to ease monetary policy further.

On the supply side, iron ore shipments from Australia in the week to June 9 rose to 19 million tons, up 7% from the week before, according to Marcura data compiled by Bloomberg. That marks a second weekly increase, boosting volumes just as China braces for warmer, wetter weather that’s expected to further stifle steel demand.

Iron ore rose 1.1% to $111.95 a ton as of 3:25 p.m. in Singapore. There was no trading on Dalian’s exchange and in Shanghai, with Chinese markets closed due to public holidays.

Among base metals, copper added 0.1% to $8,612 a ton on the London Metal Exchange. Aluminum climbed rose 0.3% and zinc increased 1.1%.

(By Liz Yee Xing Ng and Annie Lee)