Iron ore futures advanced on Thursday as investors assessed China’s trade figures amid growing optimism over the country’s infrastructure spending.
Exports rose 3.5% in dollar terms in April from a year earlier, while imports dropped 14.2%, the customs administration said Thursday. Customs data also showed a 11.4% increase in China’s iron ore imports in April on robust demand from steelmakers as downstream sectors started to emerge from lockdowns.
Gao Feng, spokesman for the Ministry of Commerce however warned that exports and imports face unprecedented risks and challenges brought from the pandemic. He repeated that the ministry will implement well measures announced previously to support trade. This came after Chinese Premier Li Keqiang said on Wednesday that the government will further extend tax cuts for small firms and create policy tools that will enable banks to issue more unsecured loans.
Chinese demand for ore has been fuelled by mills ramping up production on an early recovery in construction activity and expectations that more government stimulus for infrastructure will revive consumption.
Futures in Singapore were firmer in London. Jun contract was seen trading up to 82.8. Q4 also traded up from 76.7 to 76.9. Jul was seen trading at 80.8 in early London morning but since moved above 81.0. there were also interest in Sep contract, trading at 78.55 and 78.6.