Iron ore headed toward the highest close since May as China’s renewed focus on supply-side reform lifted expectations for the country’s steel market.
Futures of the steel-making ingredient were on course for a second weekly gain as prices rose back above $96 a tonne. Beijing’s top leaders this week vowed to curb outdated industrial capacity, which could boost prices of raw materials due to the potential positive impact for steel-mill margins.
Analysts at Citigroup Inc. see the signals from China as a likely precursor for so-called supply-side reform 2.0. However, compared with 2015-18, they see a less aggressive capacity cut, and a limited follow-up of demand measures, according to a research note.