Iron ore futures hit a three-month high on Wednesday as investors bet on better demand following China’s support for the property sector, despite ample stocks in the world’s top consumer.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 2.7% higher at 921 yuan ($127.22) a metric ton, reaching its highest level since Feb. 19.
The contract rose for a fifth consecutive session, and has jumped 7.2% in total during this period.
The benchmark June iron ore SZZFM4 on the Singapore Exchange rose 1.5% to a three-month high of $122.55 a ton as of 0814 GMT.
China last Friday announced “historic” steps to stabilise its crisis-hit property sector, with the central bank facilitating 1 trillion yuan ($138 billion) in extra funding and easing mortgage rules, among others.
The move raised investors’ prospects for steelmaking ingredients, as the property sector is a major consumer of steel.
The futures rally was mainly due to positive macro sentiment, but fundamentals lagged with plenty of available supply in the spot market, an iron ore trader said.
Amid growing imports and domestic output, iron ore inventories at major Chinese ports assessed by information provider Mysteel stood at 147.4 million tons, up 6% from the beginning of March.
Other steelmaking ingredients on the DCE climbed, with coking coal DJMcv1 advancing 4.3% and coke DCJcv1 up 4.6%.
Steel benchmarks on the Shanghai Futures Exchange were up. Rebar SRBcv1 rose 1.7%, hot-rolled coil SHHCcv1 added 1.2%, wire rod SWRcv1 up 3.2% and stainless steel SHSScv1 climbed 2.8%.
Source: Hellenic Shipping News
