Iron ore rose to a fresh 18-month high after Chinese President Xi Jinping pledged to strengthen the economy and job creation in the world’s biggest steel-making nation.
The material rose as much as 2 per cent on Tuesday, days after capping its first annual gain in three years, even amid China’s slow economic recovery during 2023.
Adding to the past stream of pledges to boost the economy in recent months, Xi promised in a televised message to the nation Sunday to “consolidate and strengthen the momentum of economic recovery, and work to achieve steady and long-term economic development”.
Beijing is expected to target a growth goal of around 5 per cent in 2024. That could help the nation’s struggling steel industry, which has been hit by turmoil in the property-developer sector. There were fresh signs of stalling demand, with the steel industry purchasing managers’ index in December falling to 46 from 48.2 — a figure below 50 signals a contraction.
Still, steel producers can expect low-single-digit percentage growth in the new year, boosted by positive momentum from the second half of 2023, infrastructure spending and strong renewable-energy investment, Bloomberg Intelligence analysts Grant Sporre and Michelle Leung said in a report.
A private gauge of China’s factory activity rose for the second straight month in December, signalling some momentum for the economic recovery.
Iron ore futures in Singapore were trading 1.7 per cent higher at $US142.50 a tonne in Tuesday trade. Futures in Dalian climbed 1.5 per cent, while rebar and hot-rolled coil also advanced in Shanghai.
Bloomberg