Iron Ore Achieves Highest Price Since Mid-2022 Amid China's Economic Recovery

In a significant surge, iron ore prices reached their highest point since June 2022, indicating potential positive outcomes from Beijing's recent measures to stabilize the property market's decline, as reported by Bloomberg.

On Tuesday, futures in Singapore surpassed the $140 per ton mark in a session marked by thin trading.

Market observers are increasingly optimistic about China's economic recovery, especially within its steel-intensive property sector. After a relatively subdued post-pandemic reopening in the past year, signs of momentum are emerging, pleasing investors.

China's largest state-owned banks initiated the third round of rate cuts for the year on Thursday, as authorities intensify efforts to boost economic activity.

This move follows Beijing's announcement in November of a substantial 1 trillion yuan ($127 billion) plan aimed at promoting urban revitalization. This plan is expected to provide relief for the steel-intensive property sector, which has been facing challenges due to a series of developer defaults.

As expectations for improved demand rise, steel mills, previously maintaining lean iron ore stockpiles, may now experience pressure to restock if demand surpasses existing supplies.

Positive improvements in recent weekly commercial housing transaction data have contributed to a bullish sentiment, according to Atilla Widnell, the managing director at Navigate Commodities Pte in Singapore. He stated, "We maintain that Iron Ore futures should quite easily target $145-158 a ton at least by next quarter."

As of 12:58 pm PST, iron ore prices climbed 1.5% to $140.55 per ton. In Dalian, futures were 1.3% higher, while steel rebar and hot-rolled coil both experienced advances in Shanghai.