June 21, 2024

The Catholic Transcript

Complete News World

China measures crude oil rise to two-month high

(Bloomberg) — Iron ore boosted profits to a two-month high as Chinese banks bolstered the economy and ramped up production from steelmakers later in the year.

In Singapore, futures are showing the fifth weekly advance, the longest period of rise since May, with the most optimistic forecasts for demand. On Monday, Chinese banks cut interest rates for the first time in 20 months, following the Monetary Authority’s decision earlier this month to reduce the amount financial institutions must hold in reserves. The move reflects the Chinese government’s shift in focus from real estate and coronavirus control to economic recovery.

“Macro-policies to stabilize the economy and reduce reserve requirements by the Chinese central bank have boosted market confidence, while expectations of resuming mill production have boosted iron ore prices,” Huatai Futures wrote in a report.

Iron ore is up nearly 50% from its November low due to prospects for stimulus and a roughly 12% increase in crude steel production in the first third of December from the previous month. Mills had increased trading volumes this month after steep cuts earlier this year.

However, risks remain as restrictions on steel production and ahead of the Winter Olympics could weigh on iron ore demand.

In Tangshan, the center of China’s steel industry, authorities activated precautionary measures to reduce pollution from Sunday until further notice, according to consultancy Mysteel, which quoted an official statement. The local government did not respond to requests for comment.

Iron ore rose 6.7%, to $127.95 a ton, and was trading at $124.20 at 3:06 pm in Singapore, after a jump of 11% last week. Prices in Dalian closed 0.4% lower. Rebar and hot rolled coil are also in Shanghai.

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