STEEL NEWS

Iron ore rises on Chinese stimulus, while stainless soars on record nickel prices

Iron ore rose on Thursday after China's largest steelmaker cut additional discount rates, while stainless steel futures jumped to a three-month high on record high prices for nickel, a key ingredient, Reuters reported.

The best-selling May iron ore contract on China's Dalian Commodity Exchange rose 2% to $747 (117.74) a tonne, the highest since Jan. 13.

The most active March contract for steel raw materials on the Singapore Exchange rose by 1.9% to $132.95 per ton.

China stepped up its monetary easing efforts to support the slowing economy this week by lowering a set of key interest rates and credit benchmarks, with markets pending further moves.

“We view this week’s rate cuts as a preemptive move to restore growth in 2022,” said Vivek Dhar, commodity analyst at the Commonwealth Bank of Australia, citing negative pressure from the reintroduction of restrictions due to COVID-19. and a downturn in the real estate sector.

In addition to stimulus measures from China, higher steel margins have also supported iron ore prices, Dhar said.

Spot 62% Fe-grade iron ore for delivery to China jumped to $132 a tonne on Wednesday, the highest level since Jan. 13, according to consultancy SteelHome.

“The fact that steel margins rose from November to December also suggests that steel demand has held up reasonably well, potentially indicating that demand for steel from China’s infrastructure sector could offset the decline in demand from China’s real estate sector. ' said Dhar.

However, he said restrictions on steel production in China are likely to return ahead of and during the Lunar New Year from Jan. 31 to Feb. 6, as well as during the Beijing Winter Olympics next month.

Stainless steel on the Shanghai Futures Exchange rose 6.9%, hitting its highest level since the end of October, as supply concerns and strong demand pushed Shanghai nickel to a record high.

Shanghai rebar remained practically unchanged, while hot-rolled coil fell in price by 0.3%.

Dalian coking coal fell 0.7% and coke fell 1.5%.