Chinese iron ore climbs to eight-month high on China stimulus hopes (NYSE:VALE)

Chinese iron ore climbs to eight-month high on China stimulus hopes (NYSE:VALE)

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Iron ore futures in China rose to eight-month highs on Friday, as gloomy domestic factory activity data lifted expectations of additional economic stimulus measures for the world’s top steel producer.

According to Reuters, the most-traded iron ore (SCO:COM), for September delivery, on China’s Dalian Commodity Exchange ended daytime trade +3.5% at 926 yuan/metric ton ($145.75) to conclude its sixth straight weekly gain after earlier touching its best level since August 5 of 926.50 yuan.

On the Singapore Exchange, iron ore’s most-active May contract recently was +1.4% to $161.90/metric ton.

Among relevant tickers: NYSE:VALE +2.7%, NYSE:BHP +1.9%, NYSE:RIO +1.9%.

The spike in domestic COVID-19 cases pushed China’s factory activity in March to its fastest decline in two years, which J.P. Morgan economists expect will prompt the Chinese government to roll out policy measures, including fiscal support for infrastructure projects and the corporate sector.

The JPM economists said additional stimulus beyond the National People’s Congress’ policy guidelines hinges on whether growth pressure increases further.

“Vale has a great opportunity to be the primary ore and mineral supplier for most of the west,” Sandis Weil writes in a bullish analysis published recently on Seeking Alpha.

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