FX.co ★ Iron Ore Rebounds from 6-Month Low

Iron ore futures in China adjusted to CNY 710 per tonne, recovering slightly from a downward trend that reached a six-month low of CNY 685 on April 8th. This rebound was influenced by the potential for economic stimulus, which helped counterbalance concerns over a slowdown in manufacturing and construction amid the ongoing trade conflict between China and the United States. Following the White House's decision to hike tariffs on Chinese goods to 145%, China responded by raising duties on American goods to 125%. Despite these tensions, Beijing has signaled plans to bolster its economy, particularly industries heavily reliant on U.S. markets, thereby increasing expectations for a swift implementation of stimulus measures. Supporting this optimism, recent credit aggregate data indicated a surge in bond sales, which improved the outlook for the construction sector and offered much-needed liquidity for property developers burdened with debt—key consumers of ferrous metals in China. Mitigating further pessimism from the trade tensions, China's official construction Purchasing Managers' Index (PMI) reached a 10-month high in March, providing additional confidence.