SINGAPORE, Feb 8 (Reuters) - Iron ore rose for a second session on Wednesday with expectations of strong demand in the world’s top steel consumer China buoying the market.
Economic data in the coming weeks is expected to show the world’s second-largest economy got off to a good start in 2017, with steady growth giving the central bank room to slowly tighten monetary policy and contain the risks from high levels of debt. Trade data is due on Friday.
“Iron ore spot prices rebounded strongly after the post-Lunar New Year weakness earlier this week,” ANZ said in a research note.
“Steel prices in China jumped as traders viewed the recent falls as unwarranted. Sentiment remains positive, with solid economic data increasing expectations of strong demand this year.”
The market had earlier come under pressure since the country launched a surprise short-term rate hike last week, boosting financing costs for holders of commodities, which are priced in dollars.
As of 0305 GMT, the most-active rebar on the Shanghai Futures Exchange was up 2.3 percent at 3,202 yuan a tonne. It gained 1 percent in the previous session.
Iron ore on the Dalian Commodity Exchange rallied 3.7 percent to 637.5 yuan. The market rose 1.4 percent on Tuesday.
China’s foreign exchange reserves unexpectedly fell below the closely watched $3 trillion level in January for the first time in nearly six years, though tighter regulatory controls appeared to making some progress in slowing capital outflows.
China has taken a raft of steps recently to make it harder to move money out of the country and reassert a grip on its faltering currency, even as U.S. President Donald Trump steps up accusations that Beijing is keeping the yuan too cheap.
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB rose 1.3 percent on Tuesday, according to Metal Bulletin. (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips)