The weekly gains in the iron ore price comes as China unveils record cuts to its benchmark reference rate for mortgages, bolstering hopes for economic support.
It was a much needed announcement as the country’s zero-covid policy has dealt a blow to consumer sentiment. This is the second cut this year by Beijing, a move that sparked a relief rally in equities as the world’s second-largest economy seeks to revive the housing market to support a slowing economy.
With nationals counting down to June, investors are feeling optimistic that restrictions are set to ease. This in turn saw the iron ore futures first weekly advance in five as market participants monitor the shrinking stockpiles of the steelmaking raw material, according to Mysteel data.
Base metals were mixed on Friday. Nickel and copper fell to the order of 0.9 per cent while aluminium rose 1.3 per cent.
In other local news, the Labor government has pledged to introduce tax breaks for electric cars which would save people about $2,000 on a $50,000 vehicle. The policy would cost $200 million over three years and would work by exempting some electric vehicles below the luxury-car tax threshold from import tariffs and fringe benefits tax. The discount is slated to begin from July this year and is set to be reviewed in three years’ time to reassess the take-up down the track.
What does this mean for looking ahead?
Iron ore miners are getting a bit of attention this morning, rallying amid the news. The same with base metal miners.
Let’s look at a handful of share prices. Fortescue Metals (ASX:FMG) is up 3.2 per cent to $20.79 while Imdex (ASX:IMD) is trading 0.9 per cent higher at $2.35. Mineral Resources (ASX:MIN) is trading 2.6 per cent higher at $61.37, while Lake Resources (ASX:LKE) is trading 3.3 per cent higher at $1.56.
Sources: Bloomberg, UBS, ABC News