Dalian iron ore extends gains on China stimulus bets, SGX slips from $110/T
Updates closing prices
BEIJING, July 2 (Reuters) -Dalian iron ore futures extended gains on Tuesday, supported by bets of more stimulus in top consumer China, while the Singapore benchmark retreated after touching the psychological level of $110 a metric ton.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 1.4% higher at 843 yuan ($115.94) a ton. Earlier in the day, it hit the highest since June 7 at 846.5 yuan a ton.
The benchmark August iron ore SZZFQ4 on the Singapore Exchange was down nearly 0.2% at $109.6 a ton as of 0304 GMT, after touching an intraday high of $110.2 a ton earlier, also the highest since June 7.
The ferrous market has benefited from some improved sales in the property market thanks to a slew of stimulus measures, analysts at Huatai Futures said in a note.
Steelmakers lack sufficient motivation to scale back output in the short term and the relatively high hot metal output means that mills need to restock raw materials, analysts at Chaos Ternary Futures said in a note.
Prices of the key steelmaking ingredient were also supported by lingering expectations of more stimulus from the upcoming third plenum, said analysts.
The third plenum will be held from July 15 to 18, focusing on deepening reforms and promoting the modernisation of China.
Analysts at CITIC Futures, however, cautioned that the upward momentum might not sustain for long, given that downstream steel demand is yet to seemuch improvement and the number of mills implementing equipment maintenance has increased.
Other steelmaking ingredients on the DCE advanced further, with coking coal DJMcv1 and coke DCJcv1 up 1.8% and 1.6%, respectively.
Steel benchmarks on the Shanghai Futures Exchange posted marginal gains. Rebar SRBcv1 added 0.4%, hot-rolled coil SHHCcv1 ticked 0.2% higher, wire rod SWRcv1 gained 0.3% and stainless steel SHSScv1 rose 0.5%.
"The steel market will likely maintain the upward momentum until the third plenum," analysts at Galaxy Futures said in a note.
($1 = 7.2712 Chinese yuan)
Reporting by Amy Lv and Mei Mei Chu; Editing by Subhranshu Sahu and Janane Venkatraman
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