Chinese futures booked a gain on hump day, with market expectation of further stimulus programs to spur the weakening economy affected by the coronavirus epidemic.
The most-actively traded iron ore futures on the Dalian Commodity Exchange (DCE), for May 2020 delivery jumped slightly by 0.92% day-on-day to RMB 660 per tonne on Wednesday.
The steel rebar contract for May 2020 delivery on the Shanghai Futures Exchange also went up by 1.16% day-on-day to RMB 3,477 per tonne.
However, the Tangshan billet prices had went down by RMB 10 day-on-day to RMB 3,070 per tonne at late afternoon.
Huge investment projects from China
China had rolled out investment projects worth RMB 25 trillion or $3.58 trillion over the Jan-Feb period to stimulate the economy hit by the coronavirus epidemic.
The stimulus package was almost 6 times larger than the RMB 4 trillion stimulus package introduced back in 2008 to boost its economy, hit then by the global financial crisis.
The latest stimulus package will cover infrastructure construction over 31 Chinese provinces, in building 5G telecommunications, artificial intelligence, industrial internet, smart cities, education and health care.
Some market participants were expecting further major stimulus package in the second half of the year, as China’s first quarter results were likely to be poor due to the coronavirus outbreak.
More banks rate cuts ahead
The U.S. Federal Reserve had cut interest rates by half percentage point to range of 1.00% to 1.25% on Tuesday, to blunt the economic impact brought by coronavirus epidemic.
The latest US Fed cut was the first rate cut outside of a regularly scheduled policymaker meeting since 2008 at the height of the financial crisis.
Some trade participants expect more rate cut in near term, such as another rate cut by June to weather further economic shocks.