Steel and iron ore prices increased sharply after China announced new economic rescue measures

According to Reuters, at the end of the trading session on Tuesday (October 24), iron ore futures prices increased nearly 4% thanks to the news that China is preparing to issue more debt to support the economy. However, many participants in market still show concern about the deepening crisis in the real estate sector of the world's second largest economy.

At the Dalian Commodity Exchange, iron ore futures prices increased 3.8% to 118.3 USD/ton after three consecutive falling sessions. This price will continue to be maintained on October 25.

On the Singapore Exchange, the price of iron ore delivered in November increased 3.1% to 116.2 USD/ton.
Prices of other steelmaking raw materials also increased. Coke prices on the Dalian Exchange increased nearly 3% at the end of the trading session on October 24.

Steel bar prices in China also increased about 2% to 3,670 Yuan/ton, according to data from Trading Economics.
China is set to launch new fiscal stimulus measures to boost economic recovery. According to Xinhua News Agency, the government has approved a plan to increase the fiscal deficit ratio for 2023 to 3.8% of GDP, much higher than the 3% level set by Beijing in March.

In addition, China will issue an additional 137 billion USD in government bonds in the fourth quarter to support construction and disaster relief.

In the outlook report released on October 17, Mr. Máximo Vedoya, Chairman of the economic committee of the World Steel Association (Worldsteel), said: “We expect the situation of the Chinese real estate market to stabilized at the end of the year. This helps China's steel demand to record a slight positive growth thanks to government measures."

Worldsteel forecasts that global steel demand will increase by 1.8% in 2023 and reach more than 1.8 billion tons after decreasing by 3.3% in 2022. In 2024, steel demand will increase by 1.9% to 1.85 billion tons.

Source: Vietnambiz