Iron ore prices have rallied to a six-month high, buoyed by reports of a possible easing of China’s strict COVID-19 policy and signs of improved steel demand in the world’s second largest economy.
Futures on the Singapore Exchange surged 7 per cent to $US159.55 a tonne on Thursday, and edged higher to $US161.20 a tonne on Friday to the highest level since last July.
Prices were boosted by a report that said Beijing was considering an exit from its zero-tolerance approach to COVID-19, which could potentially end the stop-start nature of mainland economic activity since the pandemic began.
Experimental opening measures could arrive in select cities in China as early as June with the arrival of summer weather, the Wall Street Journal reported.
“With the prospect of China’s zero-COVID policy being eased, it creates a much more positive backdrop for the steel market in China,” said Daniel Hynes, senior commodity strategist at ANZ.