SINGAPORE, July 15 (Reuters) – Iron ore climbed to its highest level in almost seven weeks, moving closer to $100 a tonne, as firmer steel prices in top market China spurred buying interest in the raw material.
China’s bid to push infrastructure spending to boost its economy lifted steel futures in Shanghai on Tuesday to their highest since late May. That has helped increase purchases of spot iron ore cargoes, raising chances that prices will bounce back to $100 per tonne after falling nearly 30 percent this year.
Iron ore has risen 10 percent since dropping to a 21-month low of $89 in mid-June, so far the trough this year for prices that dropped below the $100 support level in May.
Benchmark 62-percent grade iron ore for immediate delivery to China .IO62-CNI=SI rose 1 percent to $97.90 a tonne on Monday, the highest since May 27, based on data compiled by Steel Index.
“There’s a chance that the momentum can be sustained because steel prices are moving up. Definitely the government is going to help infrastructure spending and that should lend more support to steel prices, and also iron ore,” said a trader in Shanghai.
The most-traded rebar contract for January delivery on the Shanghai Futures Exchange hit a session high of 3,155 yuan ($510) a tonne on Tuesday, its loftiest since May 28. It closed nearly flat at 3,145 yuan.
Chinese Premier Li Keqiang said earlier this month that the government will step up efforts to build more infrastructure projects, including railway and energy ones, in poorer regions.
Beijing will release its gross domestic product data on Wednesday that is forecast to show that China’s economy grew 7.4 percent in the second quarter, the same pace as in January-March which was the slowest clip in six quarters, according to a Reuters poll of economists.
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