Iron ore price rallies again
The benchmark 62% Fe import price including freight and insurance at the Chinese port of Tianjin added $2.20 or 4.1% at $55.50 a tonne, according to data provided by The SteelIndex.
The advance in the Metal Bulletin's benchmark 62%-index at the ports of Qingdao-Rizhao-Lianyungang in China was $2.11 to $56.04 while lower grade 58% fines jumped $2.25 a tonne to $49.01, a 4.8% gain on the day.
Iron ore has regained all the ground lost on Monday and is trading just over 26% higher from record lows hit July 8.
Chinese steel prices have also recovered from record lows hit on Tuesday when the most traded rebar contract on the Shanghai Futures Exchange came close to dropping through the $300 a tonne level.
The People's Bank cut rates this week and introduced other policy measures in an effort to shore up the slowing economy, particularly in the property sector which accounts for a quarter of China's economy and a large proportion of steel demand.
Many observers believe further pro-growth measures could be announced in October when the country's next development blueprint will be discussed by party leaders.
But some steel producers inside the country appear to be skeptical of the impact on manufacturing and industry, given Beijing's shift away from investment-led growth in favour of a consumption and services-based economy.
Platts News quotes a large steelmaker in Hebei province as saying the measures were "geared toward helping the equity markets recover, and not toward helping manufacturing, so it was unlikely that steel and iron ore players would receive more aid."
"Banks are not inclined to extend new loans with more attractive interest rates to these lossmaking industries," the steelmaker added.
"The rate cuts are going to take some time to flow down to the manufacturing industries. It is not immediate," a source at a Zhejiang-based mill said. "We aren't getting any new loans from our bank, so there is no impact for now on improving our ability to buy seaborne iron ore."
Beijing already has a number of programs in place to boost activity and especially the raw materials sector.
The $160 billion infrastructure bonds plan it launched earlier this month is set to release the first batch of $48 billion.
This initiative follows a $173 billion recapitalization of the country's two largest development banks in two rounds in April and July as part of its ambitious "New Silk Road".