FX.co ★ Iron Ore Gains on China Stimulus Hopes, Tighter Supply

Iron ore futures in China have surpassed CNY 780 per ton, achieving a two-week high driven by optimism regarding potential new stimulus measures from China, the leading consumer. This rise accompanies a continued tightening of port inventories. Over the weekend, Finance Minister Lan Foan announced plans to intensify fiscal policy over the next five years. He emphasized the utilization of instruments such as budgeting, taxation, government bonds, and transfer payments to ensure sustained economic and social development support. Concurrently, total iron ore inventories across 35 significant Chinese ports saw a reduction of 1.32 million metric tons. Steel demand is experiencing growth particularly in China’s non-property sectors, which currently represent over 72% of total steel demand. Although there are signs of stabilization in the property market, significant growth in steel and iron ore demand will likely depend on an upturn in new construction activities.