FX.co ★ Iron Ore Rises on China Demand Hopes

Iron ore futures in China have risen above CNY 770 per ton, recovering from recent four-month lows. This recovery is driven by optimism surrounding stronger Chinese demand, which seems to be overshadowing concerns about a rise in global supply. Market participants anticipate a seasonal increase in consumption, along with fewer maintenance shutdowns than initially expected at Chinese steel mills, the world's largest consumer of iron ore. Investor confidence was further bolstered by the anticipation of additional stimulus measures, following the People’s Bank of China's commitment to maintain a "suitably loose" monetary policy, ensure liquidity, and enhance policy transmission amid economic challenges. At the same time, the Simandou iron ore project in Guinea commenced operations this week, with projections to produce up to 120 million tons for export annually.