September iron ore futures, the most heavily traded on the Dalian Commodity Exchange, rose 5.7% from the previous week to 812 yuan/tonne ($114.03/tonne) for June 2-9, 2023.
On the Singapore Exchange, quotations for the underlying July futures contract as of June 9, 2023, rose 8.2% compared to the price a week ago to reach $112.65/tonne.
Iron ore prices rose for the second week, as the market remained upbeat on expectations of increased economic stimulus for China, the world’s largest steel producer.
Last week, the Chinese government lowered interest rates on Yuan deposits to reduce corporate borrowing costs and ease the condition of the financial sector and the economy as a whole, as this action could be the start of a more active monetary stimulus.
In the short term, iron ore prices are likely to rise as the market still expects further stimulus from the Chinese economy but this positive dynamic is due to hopes so far and long-term growth in iron ore consumption and market prices requires further measures for economic recovery.
In January-May, iron ore imports to China rose by 7.7% year on year to reach 480.75 million tonnes. In May, China imported 96.17 million tonnes of iron ore, an increase of 3.9% compared to May 2022, an increase of 6.3% compared to April this year.