Dalian iron ore futures on track for weekly gain

* China to ramp up spending to revive economy – sources

* Iron ore miner Vale may continue Malaysia port ops

* China’s steel stocks at traders drop – Mysteel

By Enrico Dela Cruz

MANILA, March 20 (Reuters) – China’s iron ore futures rose 4.1% on Friday on hopes that Beijing would roll out further stimulus measures, including increased infrastructure spending, to prop up the world’s second-largest economy that has been battered by the coronavirus pandemic.

Infrastructure-led investments is expected to drive a recovery in steel demand in China, which accounts for more than half of the world’s output of the manufacturing and construction material, boosting demand for steelmaking ingredient iron ore.

The Dalian Commodity Exchange’s most-traded May iron ore contract gained 4.1% to 689 yuan ($97.03) a tonne in early trade, putting it on track for a modest weekly gain.

“The market’s expectations for further fiscal expansion are rising again,” analysts at Huatai Futures Co Ltd said in a note.

China is set to unleash trillions of yuan of fiscal stimulus to revive its economy that is expected to shrink for the first time in four decades amid the pandemic, while a planned growth target is likely to be cut, Reuters reported on Thursday citing four policy sources.

The ramped-up spending will aim to spur infrastructure investment, backed by as much as 2.8 trillion yuan ($394 billion) of local government special bonds, the sources said.

Dalian iron ore pushed higher despite news that Brazilian miner Vale SA may continue to operate the Teluk Rubiah maritime terminal in Malaysia, following a coronavirus risk assessment. The company had flagged a possible shutdown on Wednesday.

Iron ore futures on the Singapore Exchange, however, dropped 1.2%.

FUNDAMENTALS

* China kept its benchmark lending rate steady on Friday, defying expectations for a reduction to ease borrowing costs, after the central bank last week cut the amount of reserves commercial banks are required to hold.

* Construction steel rebar on the Shanghai Futures Exchange was up 1.7%, as of 0233 GMT, while hot-rolled coil , steel used in cars and home appliances, ticked up 0.3% and stainless steel gained 1.1%.

* Coking coal was flattish but coke rose 0.8%.

* Benchmark 62% iron ore’s spot price settled at $90 a tonne on Thursday, easing from Wednesday’s three-week high of $92.50, SteelHome consultancy data showed. SH-CCN-IRNOR62

* Stocks of major steel products including rebar and hot-rolled coil held by traders in 35 cities in China dropped 628,700 tonnes, or 2.4%, to 25.4 million tonnes over March 13 to 19, based on Mysteel consultancy’s survey, citing improving demand.

($1 = 7.1007 yuan)