Iron ore climbs to 1-month high on robust demand, hopes of China stimulus
BEIJING, July 4 (Reuters) -Iron ore futures extended gains into a fifth straight session on Thursday, underpinned by robust near-term demand, improved steel fundamentals, a weaker U.S. dollar and persistent hopes of more stimulus from top consumer China.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 traded 1.9% higher to 865.5 yuan ($119) a metric ton, as of 0144 GMT, the highest level since June 3.
The benchmark August iron ore SZZFQ4 on the Singapore Exchange was 0.18% higher at $113.65 a ton, the highest since June 7.
"Relatively high level of hot metal output, despite signs of having touched a ceiling, underpinned ore demand in the near term," analysts at Jinrui Futures said in a note.
"Also, a seasonal ramp-up in iron ore shipments to meet quarterly targets will likely come to an end," they added.
Supporting prices of the key steelmaking ingredient is also persistent expectation of more stimulus in China later this month.
"A stabilising macroeconomic backdrop in China has provided much-needed support to the market," ANZ analysts said in a note.
"The upcoming Third Plenum meeting over July 15-18 will be crucial as more stimulus is likely to be announced to bolster the sector."
Additionally, improved fundamentals of construction steel, with demand picking up and destocking continuing, also boosted overall sentiment, said analysts at Huatai Futures.
A weaker dollar =USD after softer-than-expected U.S. economic data also lifted broad commodities including iron ore and steel.
Other steelmaking ingredients on the DCE also gained, with coking coal DJMcv1 and coke DCJcv1 up 0.6% and 1.1%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were higher. Rebar SRBcv1 climbed 1.1%, hot-rolled coil SHHCcv1 added nearly 1%, wire rod SWRcv1 ticked up 0.5% and stainless steel SHSScv1 advanced 0.7%.
($1 = 7.2705 Chinese yuan)
Reporting by Amy Lv and Mei Mei Chu; Editing by Mrigank Dhaniwala
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