Iron ore price increased by nearly 3%, surpassing 130 USD/ton

Iron ore prices rose on January 19 as the People's Bank of China (PBOC) will apply more stimulus measures to support the economy, raising hopes for metal demand.

Iron ore futures prices on the Singapore exchange increased by more than 3%, surpassing the 130 USD/ton mark. The price of 62% Fe ore imported into North China was at 131.2 USD/ton, up 2.8% compared to the closing session on January 18.

Iron ore prices on the Singapore Exchange. Source: Binhkhanhsteel

China, the world's largest metal importer, recorded a slump in the real estate market, credit stress and repeated outbreaks of the Covid-19 epidemic. The PBOC this week cut interest rates for the first time in nearly two years, signaling the start of an easing cycle.

China tends to strengthen macro policies to stabilize the economy in the context of a downtrend in the real estate market, according to Huatai Futures.

According to Mysteel, Tangshan - China's major steel-producing region, has announced plans to limit production this winter. Accordingly, blast furnace utilization rate in the city will decrease from 78% to 63% because 16 furnaces will be closed from January 30 to February 20 and from March 3 to March 13, reducing capacity. about 60,000 tons/day.

The resumption of production at steel mills may have to wait until after the Lunar New Year. This affects steel supply, analysts from Huatai said.

Steel futures price on the Shanghai exchange on January 20 at 4,733 yuan/ton ($746.3/ton),   0.7% higher than January 19 and up nearly 4%. since the beginning of the year. This is also the highest level since mid-October 2021.

NDH