Seaborne iron ore prices surged above $110 per ton on Thursday, driven by the anticipated revival of steel mill production and expectations for additional fiscal and monetary measures. The Kallanish KORE 62% Fe index and the KORE 65% Fe index experienced slight declines on Thursday, reaching $110.71/dry metric tonne cfr Qingdao and $123.12/dmt cfr respectively.
Conversely, the KORE 58% Fe index saw a notable increase to $100.36/dmt cfr, with reports indicating the sale of 90,000 tonnes of Newman Fines at $110.1 per ton with a laycan of 11-20 April. On the Dalian Commodity Exchange (DCE), the primary May 2024 iron ore contract rose by CNY 4.5/t ($0.62/t) to CNY 831.5/t ($115.49/t). Meanwhile, on the Singapore Exchange, April futures for 62% Fe and 65% Fe climbed by $4.06/t and $4.31/t respectively to settle at $109.78/t and $122.28/t.
The contract for 58% Fe futures also increased by $4.31/t to $99.53/t.Moreover, scrap and billet prices exhibited further gains, with heavy scrap delivered to mills in the Yangtze River Delta rising by CNY 17/t to CNY 2,674/t, and Tangshan billet increasing by CNY 20/t to CNY 3,410/t.In terms of monetary policy signals, Xuan Changneng, deputy governor of the People's Bank of China, hinted at potential reductions in China's reserve requirement ratio during a press conference on Thursday.
This signal of loose monetary policy could attract more institutional funds to financial markets, leading to increased bond market financing and reduced financing costs. Additionally, market speculations suggest that the National Development and Reform Commission will accelerate the central budget investment plan progress and review local government special bond projects to drive key projects forward and stimulate market demand.
Notably, there are indications of a shift in sentiment within the real estate market as some local commercial banks have started raising mortgage interest rates in certain regions like Huizhou in Guangdong Province and Hebei Shijiazhuang from April onwards, signaling a potential change in mortgage rate trends despite no national policy announcement yet.
