Iron ore prices rose to a peak in four months after China eased Covid restrictions in the country, fuelling hopes for a rise in consumption.
The most-traded May iron ore contract on China's Dalian Commodity Exchange advanced 1.4 percent to 790 yuan ($113.37) a tonne, as per Reuters. Dalian iron ore prices have risen about 30 percent since the beginning of November.
Brokerage Citi has predicted that the gradual reopening of China’s economy through looser Covid-19 restrictions could propel iron ore prices as high as $150 a tonne by June next year.
Traders are also banking on hopes that the property sector, good for 40 percent of China’s steel consumption, will see further easing of policies at the Central Economic Work Conference scheduled for next week, where policymakers will discuss goals for the new year.
India may also start exporting more iron ore cargoes after the government scrapped some taxes, especially those on lower-grade material.
India is not a major player in the seaborne iron ore market, with its exports dwarfed by those from Australia and Brazil, but in 2020 it supplied an average of 4 million tonnes a month, according to Kpler data, with China as the major buyer.
(With inputs from agencies)
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