China data boosts iron ore futures, traders optimistic

Iron ore futures prices experienced a resurgence on Monday following encouraging data from China, the world’s leading consumer, which reignited hopes for increased steel demand in the upcoming weeks, Reuters reported on Monday.

Additionally, some traders closed out their short positions, contributing to the upward trend.

The predominant May iron ore contract on China’s Dalian Commodity Exchange (DCE) rebounded and concluded daytime trading 0.9% higher at 803 yuan (USD 111.56) per metric ton. This recovery followed an 11% decline the previous week.

Meanwhile, the benchmark April iron ore contract on the Singapore Exchange rose by 3.7% to USD 103.65 per ton as of 0835 GMT.

This development provided a boost to market sentiment, particularly in light of data indicating a larger-than-anticipated decline in China’s steel inventory from its previous peak in February.

Furthermore, China’s policy bank opted to maintain a key policy rate while withdrawing funds from a medium-term policy loan operation on Friday.

In another supportive indication, total shipments from Australia and Brazil – significant iron ore suppliers – decreased by 12.5% week-on-week to 22.08 million tons for the week ending March 18, as per data from consultancy Mysteel.

However, analysts cautioned that lukewarm near-term ore demand could continue to pose challenges to market sentiment and prices.