* Spot iron ore prices at 3-week peaks, steel futures up
* China raises export tax rebate on almost 1,500 products
* Massive stimulus packages readied amid global health crisis
By Enrico Dela Cruz
MANILA, March 18 (Reuters) - Iron ore futures in China on Wednesday jumped to their highest in more than seven months on hopes of an improvement in demand as authorities rolled out more stimulus to support industries battered by the coronavirus pandemic.
Prices of the steelmaking ingredient in the physical market were near three-week peaks, underpinned by falling inventories at China’s ports and the resilience in futures of iron ore despite the virus’ rapid spread.
The Dalian Commodity Exchange’s most-traded iron ore contract, with May expiry, rose as much as 3.5% to 688 yuan ($98.15) a tonne in morning trade, the highest since Aug. 5, 2019. Futures on the Singapore Exchange gained as much as 2.3%.
Industry benchmark 62% iron ore’s spot price stood at $92 a tonne on Tuesday, the highest since Feb. 24, based on data from SteelHome consultancy. SH-CCN-IRNOR62
With all ports in China having returned to normal operations, according to the government, seaborne trade activities should improve further, said Helen Lau, a metals and mining analyst at Argonaut Securities in Hong Kong.
She said top steel producer China has also provided additional policy support to exporters, citing an increase in steel export tax rebates.
China will increase export tax rebates on almost 1,500 products from March 20, the finance ministry said on Tuesday, as the government looks to ease the pressure on companies hit hard by the virus outbreak.
“We take the view that increasing exports rebates will allow Chinese steel makers to churn out more steel products, likely in preparation for a possible demand recovery outside China under fiscal stimulus policies,” Lau wrote in a note.
She added that more than 40% of China’s exports are shipped to Asian markets, a region she believed has seen less infections than the United States and Europe.
* Construction steel rebar on the Shanghai Futures Exchange was up 0.7% by 0246 GMT, while hot-rolled coil , used in cars and home appliances, gained 0.8%, while stainless steel was little changed.
* Coking coal edged up 0.2% and coke climbed 0.7%.
* The world’s richest nations prepared more costly measures on Tuesday to combat the global fallout of the coronavirus that has infected tens of thousands of people, triggered social restrictions unseen since World War Two and sent economies spinning toward recession.
($1 = 7.0094 yuan)
Reporting by Enrico dela Cruz; Editing by Aditya Soni