At long last there was some glimmer of hope in the steel and iron ore market with government indicating about possible stimulus and some local governments have started to implement small stimulus measures to boost activity.

Contract prices for September iron ore on the Dalian Commodity Exchange have risen in a day by CNY 24 per tonne to CNY 717 per tonne the highest level since May 28. Rebar contract prices for October have gone up CNY 36 per tonne on the Shanghai Futures Exchange to CNY 3,115 per tonne the maximum level since May 29.

However, modest demand for finished products presently can clip the wings of fledgling rally. Moreover any talks about a slowdown in the economic growth again by the government will puncture the stability exuded during last week.