Iron ore futures rebounded from previous losses, despite market concerns over rising covid cases that resulted in lockdown measures.
The futures of Dalian Commodity Exchange (DCE) for May delivery rose by 5.17% day-on-day or up RMB 39.50 to RMB 804/mt, during the day trading session on Wednesday.
The rebar futures also increased by 3.22% or up RMB 153 day-on-day to RMB 4,904/mt, during the day trading session.
Better growth indicators in the Chinese economy
China’s National Bureau of Statistics (NBS) data showed that the country economy is on track for recovery with growth recorded for both industrial demand and productions.
For instance, the country’s industrial added-value reached a growth of 7.5% yearly on Jan-Feb 2022, higher than the average growth of 6.1% recorded during the 2020-2021 period, led by strong annual growth of 14.4% and 9.6% from high-technology and machinery manufacturing sector respectively.
Part of the drive was also led by the new-energy vehicles during the first two months of the year, with growth of 150.5% on-year, which increased steel demand especially for cold rolled strip.
However, the Chinese property sector remained in poor shape, as the latest statistics revealed that new home sales, property sales and land purchases fell by 12.2%, 9.6% and 42.3% year-on-year respectively during the Jan-Feb 2022 period.
Growing concerns over China’s lockdowns
There were some growing market concerns over the new wave of covid infections in China, that led to new lockdown measures that affected economic activities.
As Australia and New Zealand Banking Group (ANZ) economists suggested that the new Chinese lockdowns to contain omicron virus outbreak may affect half of China’s GDP and population.
So far, the Chinese province of Jilin and technology hub of Shenzhen are among the badly hit with supply chains being disrupted like automobile factories like Toyota, Volkswagen and tech firms like Apple.