April 18, 2024 04:10 GMT
Back To Late Feb Levels On China Stimulus Hopes
IRON ORE
The active Iron ore contract in Singapore is back to late Feb levels, last near $116.25/ton (earlier highs were at $117.50). We are now around 20% above early April lows in the contract.
- The better equity tone is likely helping at the margin, although the recovery in iron ore has outperformed the rebound in property related equity indicators, which are only marginally above recent lows.
- Yesterday the NDRC stated China’s domestic demand remains insufficient with weak social expectations. It was also acknowledged that the economic foundation was not yet solid and still faced challenges (see this link). This is expected to see a speed up of ultra-long government bond issuance (see this link for more details).
- This, along with an expected restocking of iron ore inventories by China mills, have been noted as sources of support.
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