Iron ore futures gained for a third straight session on Thursday, hitting multi-month highs, as hopes of a new wave of reforms to rein in steel supply and more stimulus measures from top consumer China boosted sentiment.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange closed daytime trade 3.67% higher at 763.5 yuan ($106.39) a metric ton, a three-month high.

The benchmark August iron ore (SZZFQ5) on the Singapore Exchange climbed 3.41% to $99.35 a ton, the highest since May 22, as of 0724 GMT.

It’s mainly driven by the expectation of supply-side reform in the steel sector, which benefited prices, said a Shanghai-based analyst on condition of anonymity as he is not authorised to speak to the media.

The head of the state planner said on Wednesday that the size of China’s economy will exceed 140 trillion yuan this year, despite the prolonged trade war with the United States and persistent deflationary pressures.

That somewhat fueled hopes for “whether more stimulus will be rolled out in the high-level meeting later this month,” analysts at broker Yongan Futures said.

Moreover, “iron ore benefited from the rapid rally in the coal market driven by expectations of supply-side reform,” Pei Hao, an analyst at international brokerage Freight Investor Services, said.

“There was no fundamental change in the supply and demand of iron ore. Shipments fell but a reduction in arrivals will probably manifest until late July.”

Other steelmaking ingredients on the DCE posted further gains, with coking coal NYMEX:ACT1! and coke (DCJcv1) rising 4.24% and 3.56%, respectively.

Steel benchmarks on the Shanghai Futures Exchange strengthened. Rebar RBF1! added 1.89%, hot-rolled coil EHR1! advanced 2.16%, wire rod (SWRcv1) gained 1% and stainless steel HRC1! rose 1.06%.
Source: Reuters