Iron ore prices in China continued to increase after the Central Bank's announcement. Prices reached the peak point of the last week.
On the Dalian Commodity Exchange (DCE), the most traded May iron ore contract DCIOcv1 increased by 1.92% to settle at 104.82 USD. Coke DJMcv1 and cokeDCJcv1 were also up 2.61% and 2.28%, respectively.
On the Singapore Exchange, February iron ore SZZFQ4 index increased by 1.75% to 98.86 USD.
On the Shanghai Futures Exchange, prices were generally on an upward trend. Rebar SRBcv1 increased by 1.44%, hot rolled coil SHHCcv1 by 1.45%, stainless steel SHSScv1 by 0.8% and wire rod SWRcv1 by 1.14%.
A statement released by the Central Bank of China on Monday said that the Chinese government would favor a loose monetary policy to boost investment.
Market analysts attribute the increase in iron ore prices to the Chinese central bank's announcement of aggressive monetary policies it plans to implement this year. The aim of these monetary policies is to stimulate the economy and mitigate the impact of the expected US tariffs.
However, it is expected that this rise will not be permanent as demand in the market is currently at a steady level and purchases are almost complete ahead of the Chinese New Year.
Chinese New Year will start on January 28th.
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