Iron ore futures in China extended gains into a third session on Wednesday, fuelled by positive market sentiment on news China and the United States were on course for a Phase 1 trade deal.
U.S. President Donald Trump said on Tuesday he and Chinese President Xi Jinping will have a ceremony to sign the first phase of the trade deal agreed to this month.
The most-traded iron ore futures on the Dalian Commodity Exchange, for May 2020 delivery, rose 0.7% to 645 yuan ($92.12) as of 0229 GMT.
However, prices of the steelmaking ingredient were also supported by demand worries amid heavy pollution alert in China’s northern Hebei province, home to the country’s top steelmaking cities.
The air quality index exceeded 200, indicating heavy pollution, in the capital city of Hebei on Wednesday, data from the Ecology and Environment Ministry showed.
Prices for spot cargoes of iron ore with 62% iron content for delivery to China fell $1 to $92.5 per tonne on Tuesday.
Other steelmaking ingredients were mixed, with Dalian coking coal edging down 0.2% to 1,153 yuan per tonne, while Dalian coke gained 0.4% to 1,852 yuan per tonne.
FUNDAMENTALS
* Steel rebar on the Shanghai Futures Exchange, for May 2020 delivery, dropped 0.2% to 3,514 yuan per tonne.
* Hot-rolled coil, used in cars and home appliances, dipped 0.1% to 3,547 yuan per tonne.
* Shanghai stainless steel futures, for February 2020 delivery, was down 0.3% at 14,285 yuan per tonne.
* Shanghai Futures Exchange has said it will relax trading position limits on its product contracts from next year for 37 futures trading companies to encourage trading activity and increase market participation.
* China plans to repair environmental damage caused by mining in a market-oriented way, bringing in more participants and encouraging social investment by granting some land usage rights after the ecological restoration is completed.
* China will step up support for employment to cope with rising pressure on job security due to internal and external challenges, the cabinet said, as the world’s second-largest economy slows.
