Shanghai steel futures jumped by more
than 2 percent on Thursday after China slashed its bank reserve requirement for
the first time in three years. The most-traded May rebar contract on the
Shanghai Futures Exchange climbed 2.6 percent to 4,179 yuan a tonne by the
midday break, its steepest gain since Nov. 4
Sellers of imported ore in China also
raised offer prices on Thursday after slashing them for the most part of the
past two weeks. Offers for Indian fines Fe 63.5/63 went up to $144-145/MT.
Whereas, Australian pilbar iron ore fines rose a dollar to reach $132-134/MT and
Newman fines also increased by a dollar to reach $136-$138/MT.
The half percentage point cut in
China's bank reserve requirement ratio (RRR) is seen as a policy shift to ease
credit access and shore up the world's second-largest economy. This move might
help iron ore prices recover this month after falling to three-week lows on
Tuesday.
“The RRR (reserve
requirement ratio) cut means more liquidity and can cheer up the market, so we
can't rule out the possibility that iron ore prices could rise in
December,” said an official who buys iron ore for a small-sized steel mill
in northern China.
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