Iron ore and steel futures have surged today on hopes for further stimulus in China and an improving economic outlook.
Prices
for physical delivery of iron ore to China rose 19 per cent to $63.74 a
tonne on Monday, according to Metal Bulletin, marking the biggest
one-day rise since the index started in 2009
Iron
ore futures on the Dalian Commodity Exchange closed up 4.9 per cent to
their highest level since June, while steel rebar futures on the
Shanghai Futures Exchange rose 5 per cent, hitting their daily limit
under exchange rules.
A
rally in metal prices and mining stocks has raised hopes that commodity
prices may have bottomed and that China’s economy is improving. China
said at its annual meeting of its national legislature that it would
seek growth of 6.5 per cent for the next five years.
“Continued
focus on reforming the economy, accompanied by measures supporting
growth would be the most bullish outcome for metals,” Bank of America
Merrill Lynch analysts said.
Still,
Goldman Sachs said that it expected the rally to be short-lived “in the
absence of a material increase in Chinese steel demand.”
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