Iron ore rises on pre-holiday restocking, China stimulus hopes
"Winter restocking of iron ore among steel mills is still underway, so we believe ore prices will find some support in the near term," analyst says.
Iron ore retreated from a one-month high as investors weighed whether a recovery in Chinese demand will be sustainable.
Futures in Singapore slid as much as 3.5%, dropping for the first time in six sessions, after topping $114 a ton on Thursday to hit the highest intraday price since early June. On the London Metal Exchange, meanwhile, copper headed for the first weekly gain since mid-May.
Although all major Chinese cities have rolled out measures to tackle a prolonged housing crisis, concerns remain about a sustainable recovery in the steel-intensive property sector. Cheaper home loans were not a panacea to revive demand, Bloomberg Intelligence analyst Kristy Hung said in a report.
Iron ore has lost ground this year as China’s property woes cast a cloud over demand, while mine supplies have remained robust. Although a key Chinese Communist Party gathering later this month may see more stimulus, that may not deliver any meaningful recovery in physical metals demand, according to Sabrin Chowdhury, head of commodities research at BMI.
In a sign of abundant seaborne supplies, iron ore stockpiles held at Chinese ports expanded for the sixth week in the past seven to the highest level since April 2022, according to Shanghai SteelHome E-Commerce Co.
Iron ore futures traded 3.2% lower at $110.05 a ton in Singapore at 2:46 p.m. local time, while yuan-priced iron ore and steel contracts in China also dropped.
In London, copper traded at $9,930 a ton on the LME, up more than 3% this week amid optimism about prospects for US interest rate cuts. Among other metals, zinc and tin both headed for their fourth weekly gains.
(By Audrey Wan)
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