Iron ore led gains among industrial metals on Wednesday as China pledged to use more monetary policy tools to stimulate the economy and brighten the raw material demand outlook.
Futures in Singapore climbed over 3% to over $130 a tonne. According to Fastmarkets MB, Dalian iron ore was up about 5%, while 62% reference iron powders imported into North China were trading at $131.23 per tonne during morning trading, up 2.8% from Tuesday's close.
"As we prepare for tighter US monetary policy from the People's Bank of China, expectations of easing will encourage traders to gamble on rate-sensitive assets like commodities and bonds," Hong Hao, head of research at BOCOM International, said in a research note.
China, the world's largest buyer of metals, has been mired in real estate market recession, credit stress and repeated virus outbreaks. In response, the central bank cut its policy rate for the first time in almost two years this week, signaling the start of a easing cycle.
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