Iron ore futures continued the bullish run amid better buying activities and market optimism over China’s economic plan to chart future growth.
The most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange surged by 2.41% day-on-day to RMB 785 on Wedensday.
The steel rebar contract on the Shanghai Futures Exchange also rallied up by 1.44% day-on-day to RMB 3,668 per mt.
Better buying interests for December cargoes
The paper market uptick was partly attributed to better buying interests for December-arrival cargoes among trade participants.
In contrast, the November laycan cargoes were oversupplied and thus prices moved in downward fashion.
Many buyers were heard to be seeking for low grade fines for December laycan such as Special Fines and Fortescue Blend fines.
As more mills with flexible blast furnace mix, had switched to low-grade and high-grade combination to reduce production costs.
Awaiting for China’s 14th five year economic plan
Market participants were optimistic over China’s 14th Five Year Economic Plan which is expected to unveil some of country’s economic blueprint later this week.
In particular, the trade participants were interested in Chinese policymakers’ plan to further internationalize commodities futures contracts such as iron ore, freight, and copper.
For instances, the international copper futures contract is expected to be introduced by Nov 19, while the Shanghai Futures Exchange plans to launch a freight index futures contract in 2021.