Iron ore heads for weekly gain on resilient demand, China stimulus bets

Prices of iron ore futures climbed on Friday to their highest levels in nearly two weeks, and were on track for a weekly gain, supported by resilient demand and rising expectations of additional stimulus measures in top consumer China.

The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) TIO1! traded 1.68% higher at the highest level since March 3 at 789 yuan ($108.86) a metric ton, as of 0214 GMT, an increase of nearly 2% so far this week.

The benchmark April iron ore (SZZFJ5) on the Singapore Exchange rose 0.71% to $102.95 a ton, the highest since February 28. The price has increased by 2.5% so far this week.

China's central bank said on Thursday that it would cut interest rates and banks' reserve requirement ratio at the appropriate time and keep liquidity ample, lifting market sentiment.

Prices are also supported by a continued rise in demand for the key steelmaking ingredient, as steelmakers have ramped up production during the peak construction season in March.

Average daily hot metal output, typically used to gauge iron ore demand, climbed for a third straight week by 0.03% week-on-week to 2.31 million tons, as of March 13, a survey from consultancy Mysteel showed.

The escalating global trade war, which could dampen demand outlook, coupled with China's plan to cut crude steel output, continued to pose as headwinds, limiting further gains.

Other steelmaking ingredients on the DCE were range-bound, with coking coal NYMEX:ACT1! flat and coke (DCJcv1) down 0.67%.

Steel benchmarks on the Shanghai Futures Exchange advanced. Rebar RBF1! added 0.52%, hot-rolled coil EHR1! rose 1.15%, wire rod (SWRcv1) jumped 0.84% and stainless steel HRC1! climbed nearly 1%.

($1 = 7.2476 Chinese yuan)