FX.co ★ Iron Ore Strengthens on China Stimulus Hopes

Iron ore futures surged above CNY 767 per tonne on Friday, reaching their highest point in over three months. This surge is largely driven by increasing speculation that Beijing may introduce new stimulus measures to bolster its struggling property market. Market optimism was further fueled by reports suggesting the possibility of an imminent, high-level policy meeting, potentially akin to the 2015 Central Urban Work Conference, which prioritized urban development and infrastructure investment. The anticipation of renewed support in these sectors has led to expectations of heightened steel demand, thereby pushing iron ore prices upward. Additionally, Beijing's persistent efforts to address industrial overcapacity, particularly in the steel industry, contribute to this trend. These efforts form part of a broader strategy to combat ongoing deflationary pressures and weak domestic demand, challenges exacerbated by US tariffs. On the supply front, shipments from major exporters Australia and Brazil to China have continued to dwindle, intensifying concerns over a tightening global supply.