Iron ore responds positively on China’s plan of economic support
IRON ORE FUTURES ROSE FOR THE FOURTH STRAIGHT SESSION in the day to post over four percent gain, fueled by demand hopes as authorities in Beijing, China’s capital city, pledged to step up policy support to stabilise the economy amid the country’s Covid-19 resurgence.
A Politburo meeting chaired by President Xi Jinping said the world’s second largest economy would adopt a package of policies to support pandemic-hit industries, stepping up infrastructure construction and promoting healthy development of the property market.
Following the report, futures prices of steelmaking ingredients and construction materials firmed, with benchmark iron ore on the Dalian Commodity Exchange jumping 4.2 percent to 870 yuan or $132.05 a tonne at the close of the week’s trade.
Also, coking coal futures for Sepif the dollar remains strong. That said, there isn’t much of a bullish case for the yellow metal if the dollar continues to tear higher,” he added.
Despite gold’s recent turbulence, Mark Desormeaux, senior economist at Canadian multinaWLRQDO åQDQFLDO VHUYLFHV FRPSDQ\ Scotiabank, said he is increasing his forecast for the metal.
According to Desormeaux, gold investors may be betting tember delivery rose 0.9 percent to 2,853 yuan per tonne, while Dalian coke was up 2.1 percent to 3,625 yuan a tonne.
Steel rebar on the Shanghai Futures Exchange, for October delivery, gained 1.6 percent at 4,910 yuan a tonne, while hot rolled coils used in the manufacturing sector were up 1.5 percent to 4,996 yuan per tonne.
On the downside, Shanghai stainless steel futures for June delivery shed 0.6 percent to 19,360 yuan a tonne, down 3.9 percent for the month, while rebar and hot rolled coils declined three percent and 4.4 percent, respectively in April, hurt by sluggish consumption attributed to the Covid pandemic and transportation disruptions.
However, inventory data from the country’s leading steel market report agency, Mysteel Consultancy, showed that demand for major steel products gradually recovered since mid-April to stand at 10.35 million tonnes in the last week of that the Fed will avoid the most aggressive path of policy action later this year over concerns of slowing economic growth. This, he explained, will presumably NHHS LQaeDWLRQ KLJKHU IRU D ORQJHU period which is likely to lift the safe haven metal’s appeal.
Meanwhile, a quarterly trends report from the World Gold Council showed that the metal had a VWURQJ åUVW TXDUWHU ZLWK GHPDQG rising 34 percent.
ALUMINIUM PRICES TRADED HIGHER ON WORRIES about supply of the energy-intensive metal after Russia’s Gazprom, one of the largest publicly listed natural gas companies in the world, halted gas supplies to Poland and Bulgaria.
As a result, aluminium, which needs huge amounts of power in the smelting process, has seen curtailments of operations impacted by surging energy prices.
Benchmark three-month aluminium on the London Metal Exchange (LME) rose 0.9 percent to $3,120 a tonne.
Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan, Italy, said increasing tension over the energy sector will continue to offer long-term support to aluminium.
Torlizzi, who posited that the funthe
“In our view, gold price strength, equity market weakness, UDSLGO\ ULVLQJ LQaeDWLRQ H[SHFWDtions and unexpected geopolitical events during the quarter were the key drivers of this demand, even in spite of higher nominal rates,” the report stated.
A myriad of global economic ZRHV UHFRUG EUHDNLQJ LQaeDWLRQ an ongoing COVID crisis in China, and the Russian invasion of Ukraine were also reported to have supported gold’s demand as a safe haven asset.
The report noted further that retail investment and gold ETF inflows were both strong, but futures and OTC demand were muted, suggesting that investor participation in gold is currently not overcrowded.
It added that gold could attract further demand as central banks seek to reduce risk amid heightened uncertainty.