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Iron ore prices extend gains on hopes of demand recovery

By Fitri Wulandari

07:12, 24 November 2021

A worker fabricating steel reinforcement bar at a construction site
A worker fabricating steel reinforcement bar at a construction site - Photo: Shutterstock

Iron ore prices rallied with the Singapore Futures climbed back to the $100 level after signs that the Chinese government showed increase support for its property market, raising hopes of a recovery in demand.

Iron ore futures for December delivery on the Singapore Exchange rose 4.11% to $102.80 per tonne on Wednesday. Spot iron ore traded at $93.99/tonne on Tuesday, up from $93.39/tonne the previous day.

Seaborne iron ore with 62% iron increased 3.02% to $97.25/tonne, cost-and-freight China’s Qingdao port on Tuesday, while iron ore futures for January delivery at the Dalian Commodity Exchange surged 5.20% to CNY587/tonne ($91.88), according to data from Shanghai Metal Market (SMM) in its daily iron ore note on Tuesday.

Chart of Iron ore futures December on Singapore ExchangeIron ore futures December on the Singapore Exchange - Credit: TradingView

Positive demand outlook

“Iron ore futures rallied on expectations of a turnaround in the demand outlook. Markets have been buoyed by strong Chinese announcements, including more support for its property sector,” analysts at ANZ Research said in a note on Wednesday.

China’s central bank in its latest quarterly monetary policy report signalled possible easing measures to aid the economy’s recovery after a sharp downturn in recent months fuelled by a property slump, Bloomberg reported on Monday.


2,072.25 Price
+1.760% 1D Chg, %
Long position overnight fee -0.0193%
Short position overnight fee 0.0111%
Overnight fee time 22:00 (UTC)
Spread 0.30


25.49 Price
+0.890% 1D Chg, %
Long position overnight fee -0.0200%
Short position overnight fee 0.0118%
Overnight fee time 22:00 (UTC)
Spread 0.020

Oil - Brent

79.15 Price
-1.620% 1D Chg, %
Long position overnight fee 0.0010%
Short position overnight fee -0.0229%
Overnight fee time 22:00 (UTC)
Spread 0.045

Natural Gas

2.77 Price
-1.140% 1D Chg, %
Long position overnight fee 0.0451%
Short position overnight fee -0.0670%
Overnight fee time 22:00 (UTC)
Spread 0.0050

Iron ore prices slumped to the $90/tonne level from a record high of above $200/tonne in May on persisted concerns over demand following China’s curb on steel output to cut emission and debt-crisis faced by several Chinese real-estate companies.

Short-term support

“Recently, the market has heightened their estimate regarding steel mills resuming production due to positive news from the downstream real-estate sector (and) on the combination of the early completion of the crude steel output control target by some mills,” said SMM in its note.

SMM estimated iron ore prices will gain some support in short-term as steel mills recover profits from falling coke prices.

Read more: Iron ore prices climb back to above

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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