BEIJING: Iron ore futures prices rose for a fourth straight session on Wednesday to their highest level in nearly four weeks, supported by firm near-term demand in top consumer China and lingering expectations of more stimulus in coming weeks.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) was up nearly 0.5% at 846.5 yuan ($116.39) a metric ton, as of 0233 GMT. It touched a high of 849 yuan a ton earlier in the session, a level not seen since June 7.
The benchmark August iron ore on the Singapore Exchange was almost 0.6% higher at $110.6 a ton, the highest since June 7. “The positive signals from the property sector stimulus have improved market sentiment and helped drive ferrous prices up,” analysts at Huatai Futures said in a note.
Beijing has unveiled a flurry of stimulus measures to revive its beleaguered property market, the largest steel consumer. “Hot metal output among steelmakers stayed high and the lower arrivals of steel scrap also underscored solid ore demand,” Huatai analysts added. Transaction volumes of portside iron ore climbed by nearly 28% from Monday to 1.12 million tons on Tuesday, data from consultancy Mysteel showed.
“While the stabilising macroeconomic outlook provided some support, the market still expects more policy support in the upcoming Third Plenum meeting to revive the property sector,” ANZ analysts said in a note. The third plenum will be held from July 15 to 18, focusing on deepening reforms and promoting the modernisation of China.
Shares in Hong Kong-listed Chinese property companies surged on Tuesday, after private data showed yearly sales declines for major Chinese property developers continued to narrow in June. Other steelmaking ingredients on the DCE were mixed, with coking coal little changed, while coke ticked 0.2% higher.
Steel benchmarks on the Shanghai Futures Exchange posted marginal gains. Rebar rose 0.2%, hot-rolled coil nudged up 0.1%, wire rod added 0.5% and stainless steel gained nearly 0.2%.
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