Dalian iron ore was bound for a third straight weekly rise on Friday on optimism over China’s economic recovery prospects in 2023, with traders largely brushing aside a wave of local COVID-19 infections.
The steelmaking ingredient’s most-traded May contract on China’s Dalian Commodity Exchange TIO1! ended daytime trade 0.5% higher at 821 yuan ($117.81) a tonne. It earlier touched 841.50 yuan, the highest since June 13.
Top steel producer China has begun dismantling its tough “zero-COVID” controls that had sparked street protests and battered the world’s second-largest economy.
“Authorities appear confident that China can face the medical challenges of easing restrictions, suggesting the reopening will happen very rapidly,” said ANZ Chief Greater China Economist Raymond Yeung.
ANZ has revised its 2023 GDP growth forecast for China to 5.4% from 4.2%, anticipating the easing of restrictions to boost domestic demand in the long run.
Iron ore’s benchmark January contract on the Singapore Exchange (SZZFF3) was down 1.2% at $110.15 a tonne, as of 0705 GMT.
Adding pressure, the newly-organised state-run China Mineral Resources Group will start buying iron ore next year for some Chinese steelmakers, Bloomberg News reported .
Chinese steel benchmarks were mixed. Rebar on the Shanghai Futures Exchange RRBF1! rose 0.5%, and wire rod (SWRcv1) gained 0.9%, while hot-rolled coil EHR1! steadied and stainless steel HHRC1! dropped 2.1%.
Other Dalian steelmaking inputs retreated, with coking coal ACT1! and coke (DCJcv1) down 0.7% and 1.2%, respectively.
