Iron Ore Rebounds After Xi Pledges to Meet Economic Growth Goal
Iron ore advanced from its lowest close in more than six months after President Xi Jinping pledged to achieve economic goals for the year, despite pandemic and property headwinds.
China’s leader re-iterated the country’s “social and economic development targets” at a business forum on Wednesday, after months of turmoil that’s prompted economists to slash their growth forecasts.
Xi’s speech offered the first mention of economic targets since a Politburo meeting in April. Since then, China’s economic outlook has darkened amid a series of lockdowns that have hurt industry and sapped consumer sentiment.
Iron ore has tumbled this month as doubts grow over whether the country’s languishing property sector can stage a proper recovery from the worst slump on record. Commodities have also come under pressure more broadly due to worries grow over global growth. Most economists expect Beijing will miss its 5.5% expansion target this year.
Iron ore surged 5.3% to $113.85 a ton in Singapore as of 4:02 p.m. local time. Futures in Dalian rose 5.6%, while steel rebar and hot-rolled coil both closed more than 2% higher in Shanghai.
The steel-making ingredient should recover to $140 a ton in three months as it’s “highly exposed” to more Chinese easing, Citigroup Inc. analysts said in a note. However, there could be more near-term weakness as investors digest news around steel output cuts and weak margins, they said.
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