Dalian and Singapore iron ore futures rose on Monday, buoyed along with other Asian steel benchmarks as fresh moves by China’s central bank to prop up its slowing economy lifted the overall mood in financial markets.
The most-traded iron ore contract on the Dalian Commodity Exchange, with January 2020 expiry, climbed as much as 2.2% to 636.50 yuan ($90.38) a tonne, rebounding from a recent slump.
The most-active September 2019 iron ore futures contract on the Singapore Exchange rose as much as 1.8% to $88.37 a tonne.
China’s central bank unveiled a key interest rate reform on Saturday to help steer borrowing costs lower for companies and support a slowing economy that has been hurt by a trade war with the United States.
The reform is equivalent to making a loan rate cut of 45 basis points, according to ANZ Research’s estimate.
“The decline in loan rates bodes well for China’s credit demand and growth outlook in H2 2019 to offset the impact of the ongoing trade disputes,” ANZ said in a note.
The reform comes as a slowing Chinese economy has clouded the outlook for demand for iron ore and other steelmaking ingredients in the world’s top steel producer and consumer.
Dalian iron ore posted its fourth consecutive loss on a weekly basis on Friday, also pressured by rising stockpiles of seaborne supplies at ports across China.