Iron ore futures soared to a ten-month high on Monday. Chinese policymakers have rolled out fiscal stimulus and interest rate cuts that aim to cushion the struggling property market. The futures in Singapore have risen 40% since early August and are currently at $140 per ton, hitting the highest level since late February.
According to state-run media Global Times, Chinese policymakers plan to roll out 1 trillion yuan special bonds to boost investment and demand in 2024. These investments will improve China’s flood control system and emergency response mechanism. In addition, China’s top state-controlled banks have reduced interest rates on certain deposits, which indicates reduced lending in a push to engineer a recovery.
Bloomberg noted, “With heightened anticipation for better demand, steel mills that have depressed iron ore stockpiles to keep operations lean may now face restocking pressure should needs exceed supplies.”
“We maintain that Iron Ore futures should quite easily target $145-158 a ton at least by next quarter,” said Atilla Widnell, managing director at Navigate Commodities Pte in Singapore.
By Zerohedge.com
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