Iron ore rally built on more than just China optimism – by Clyde Russell (Reuters – January 29, 2024)

LAUNCESTON, Australia, Jan 29 (Reuters) – Iron ore is having a strong start to the year, with rising prices and robust imports by China, sparked by optimism the world’s largest buyer of the steel raw material is adding enough stimulus to boost demand.

The optimism in the past week has consigned China’s soft steel production data for December to memory, with both sentiment and fundamentals supporting the iron ore market. Iron ore contracts traded in Singapore ended at $135.31 a metric ton on Jan. 26, posting a weekly increase after declining for the two previous weeks.

The contract is also 1% higher than the low so far in 2024 of $133.99 a ton, and prices have been in a broad uptrend since August last year, when they hit a closing low of $103.21 on Aug. 3.

The gains have mirrored China’s main domestic price benchmark, the futures contract on the Dalian Commodity Exchange , which ended at 988 yuan ($137.68) a ton on Jan. 26. This was up 6% from the closing low so far in 2024 of 932.5 yuan a ton on Jan. 18, and the Dalian contract has been in an uptrend since the 2023 low of 541.5 yuan on May 25.

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