The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) ended the day up 1.15% at 789.0 yuan ($111.55) per metric ton, but fell 2.18% this week, its first weekly decline since September 27.
Meanwhile, the iron ore index for November on the Singapore Exchange was trading up 1.64% at $106.1 per tonne as of 07:20 BST, but down 3.88% this week.
China's Ministry of Finance plans to hold a press conference on fiscal policies. Analysts at Westpac noted that metals were bullish and the iron ore market's hyper-focus on today's announcement had a positive impact on the market.
The meeting comes after a briefing in which Beijing said it was “fully confident” of achieving its growth target, a briefing that emphasized the avoidance of taking stronger fiscal steps, disappointing investors.
Analysts pointed out that China's support for equity markets has boosted expectations for long-term gains in commodities. “Stability in the real estate sector and strong equity markets have the potential to boost consumer confidence, which could lead to economic recovery and stronger demand for commodities,” ANZ analysts said.
Chinese consultancy Steelhome said that the stimulus measures have boosted confidence in the housing and steel markets, but stable consumption and production growth remain important variables in iron and steel supply-demand dynamics.
Moreover, other steelmaking components in the DCE also strengthened, with coking coal and coke up 2.77% and 1.28%, respectively. Steel indices on the Shanghai Futures Exchange also recovered earlier losses. Rebar and stainless steel rose 0.25%, while hot rolled coil gained 0.6% and wire rod 0.77%.
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