NGLOY - Iron ore and steel producers poised for gains on China demand hopes

2023-06-02 09:17:22 ET

Asian iron ore prices are rallying Friday, after a surprise rise in Chinese factory activity sparked hopes for improved demand while the passage of the debt ceiling deal in the U.S. Congress helped lift stock markets around the world.

According to Reuters, the most-traded September iron ore contract on China's Dalian Commodity Exchange ( SCO:COM ) ended daytime trading +2.9% at 745.50 yuan/metric ton ($107.85) for a 9% gain on the week, easing from a session high of 755.50 yuan, its best level since April 21.

On the Singapore Exchange, iron ore's benchmark July contract rose as much as 1.8% to $103.95/metric ton, its highest since May 19 and extending its weekly gain to 6%.

Stocks of iron ore and steel producers show strong gains in U.S. pre-market activity, including ( X ) +5.3% , ( CLF ) +4.9% , ( NYSE: RIO ) +4.5% , ( MT ) +4% , ( NYSE: VALE ) +3.9% , ( NYSE: BHP ) +3.7% , ( NUE ) +2.6% .

Other relevant tickers include ( OTCQX:FSUMF ), ( OTCPK:GLCNF ), ( OTCPK:GLNCY ), ( OTCQX:AAUKF ), ( OTCQX:NGLOY )

The Caixin/S&P Global manufacturing purchasing managers' index showed Chinese manufacturing activity unexpectedly swung to growth in May.

But some observers say further government stimulus will be needed to boost China's economic recovery , as other activity data, including a weaker than expected official purchasing managers survey released earlier this week .

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