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Iron ore nears a two-week high due to resilient demand and China's stimulus bets

Iron ore nears a two-week high due to resilient demand and China's stimulus bets

Iron ore futures prices rose on Friday, reaching their highest level in almost two weeks. They were also on course for a weekly increase, thanks to a resilient demand, as well as rising expectations about additional stimulus measures from China, the world's largest consumer.

The May contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading session at its highest level since 3 March at 794 Yuan ($109.79), an increase of 2.5% from week to week.

As of 0742 GMT the benchmark April iron ore traded on the Singapore Exchange had risen 1.55% to $103.8 per ton. This was the highest price since February 28.

This week, the contract has gained 3,3%.

China's central banks said that they would reduce interest rates, the reserve ratio for banks and their liquidity at the right time.

Steelmakers increased production during March's peak construction season, which has also helped to support prices.

A survey by consultancy Mysteel revealed that the average daily hot metal production, which is typically used to gauge demand for iron ore, increased for a third consecutive week, increasing by 0.03% on a weekly basis to 2,31 million tons as of 13 March.

China's plans to reduce crude steel production and the escalating trade war in the world, which could dampen outlook for demand, continue to be headwinds that limit further gains.

Coking coal and coke, which are used to make steel, have both gained in the DCE.

The benchmarks for steel on the Shanghai Futures Exchange have advanced. Rebar rose 0.77%; hot-rolled coil climbed 1.53%; wire rod increased 0.78%; and stainless steel ticked up 0.41%.

(source: Reuters)