While the Chinese economy is shaking in the wake of the new coronavirus infection (Corona19), investors are expecting a massive stimulus from the Chinese government, and analysts say this expectation is revealed through stabilization of iron ore prices.
Hong Kong’s South China Morning Post (SCMP) quoted the Chinese steel and mining industry on the 29th as saying, “The Chinese steel sector remains stable as investors expect to boost the economy after the Corona 19 Pandemic.” Reported.
According to SCMP, the price of iron ore has remained at around $ 80 per ton as Corona 19 in China has bent down and steel makers resume production.
This is low compared to last year, when the price of iron ore peaked in five years, but it is better than the price of crude oil plunged in the corona 19 crisis.
Iron ore and steel prices have been stabilizing since early April, when the spread of corona19 in China broke down.
Experts believe that the relatively stable price of iron ore and steel products reflects expectations for stimulus to the construction industry.
An investor said, “I don’t see iron ore prices going down like oil prices.”
The Chinese government has yet to come up with a stimulus package to overcome the Corona 19 crisis, but many investors interpret the iron ore price and maintaining the stability of the steel industry as a signal to boost the economy.
“Steel prices are a key sign of the Chinese economy and a barometer to understand the state of the construction cycle driving a number of industrial activities,” said Rosilia W, an analyst at Chinese consulting firm Gabekal Dragonomics. did.
He interpreted that stabilizing steel prices from April is an important sign that predicts the recovery of the Chinese economy.