Iron ore prices in China hit a three-week high on Monday on hopes of improving demand amid policy support to the property market in China and the expectation of further stimulus.
The most-traded May iron ore on China’s Dalian Commodity Exchange closed 1.1% higher at 998.50 yuan ($139.09) per metric ton. Earlier in the session, it hit 1,006 yuan, the highest since Jan. 8.
On the Singapore Exchange, the most active March iron ore advanced 1.2% to $135.40 a ton.
China last week said it was widening the uses for commercial property lending by banks in its latest effort to ease a liquidity crunch facing troubled real estate firms.
The property sector accounts for a large portion of consumption of steel and steel-making commodities.
China also announced a deep cut in the amount of cash banks hold as reserves to increase liquidity in the economy and boost growth.
“Iron ore futures rallied after Chinese regulators offered more financial support for struggling property developers,” said ANZ analysts in a note.
Meanwhile, iron ore consumption also benefited from the improving profits at steel mills, said broker Huatai Futures in a note.
“This time of year is also interesting where we have the upcoming (Chinese) spring festival which is giving a more upbeat mood and also expectations that the “Two Sessions” in March will hopefully have some stimulus announced,” said a trader, referring to two key political meetings in China.
The most-active May rebar contract eased 0.1% to 3,968 yuan a ton, hot-rolled coil edged down 0.2% to 4,092 yuan, wire rod SWRcv1 rose 0.2% to 4,165 yuan, and stainless steel SHSScv1 dropped 0.8% to 14,155 yuan.
Other steelmaking ingredients Dalian coking coal DJMcv1 fell 1.3% to 1,780 yuan a ton, and coke dropped 1.4% to 2,444 yuan.
Source: Hellenic Shipping News
