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China iron ore,stainless steel futures rise on trade deal optimism


Chinese iron ore futures climbed more than 2% on September 26, despite little trading in the physical market ahead of the country's National Day celebrations, as hints of progress in the U.S.-China trade deal negotiations lifted investor sentiment. 
 
The most-traded iron ore contract on the Dalian Commodity Exchange, for January 2020 expiry, rose as much as 2.7% to 640.5 yuan/t ($89.83/t). 
 
U.S. President Donald Trump said on September 25 a deal to end a nearly 15-month trade war with China could happen sooner than people think and that the Chinese were making big agricultural purchases from the United States, including of beef and pork. 
 
The Chinese ferrous complex was mostly higher after Trump's remarks, with stainless steel also rebounding after a lacklustre market debut on September 25. 
 
"The rebound in the futures markets is just sentiment-driven," a Shanghai-based trader said. "It's very quiet now in the physical market because of the upcoming holiday." 
 
Cities surrounding Beijing have imposed routine output curbs on steel mills, coking coal producers and other industries to improve air quality as the nation prepares to celebrate the 70th anniversary of the founding of the People's Republic on October 1. 
 
Iron ore demand has slowed as many steel mills are winding down amid tighter production restrictions ahead of the celebrations, the trader said, adding that many traders and mill executives were also away to attend an industry conference in Qingdao. 
 
The recovery in demand for iron ore and coke, another key steelmaking ingredient, in China will likely depend on how long the stricter production curbs will be enforced, the trader said. 
 
China's environment ministry has warned that "unfavourable" weather conditions would lead to a prolonged and widespread outbreak of smog stretching along the eastern coast for around two weeks. 
 
The heavy industrial city of Xuzhou in Jiangsu province, home to more than a dozen steel firms, is also now covered by the restrictions, with local factories ordered shut on September 26. 
 
Source:sxcoal

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