MANILA: Iron ore futures rose on Monday, with the Singapore benchmark price briefly crossing $100 mark, as top steel producer China sought to ease concerns over financial distress facing its property sector but persistent COVID-19 worries capped gains.
The steelmaking ingredient’s front-month August contract on the Singapore Exchange climbed 3.8% to $100.15 a tonne, rebounding from an eight-month low of $96 hit on Friday.
On China’s Dalian Commodity Exchange, the most-traded September iron ore contract was up 1.4% at 674 yuan ($99.79) a tonne, as of 0330 GMT, after earlier touching a seven-month low of 638.50 yuan.
Other commodities in China’s ferrous complex also rebounded from recent selloffs, with construction steel rebar on the Shanghai Futures Exchange up 1.9% and hot-rolled coil climbing 2.5%. Stainless steel gained 0.3%.
Dalian coking coal added 1.5% and coke advanced 2.8%. The China Banking and Insurance Regulatory Commission on Sunday urged banks to extend loans to qualified real estate projects and meet developers financing needs where reasonable, in their latest efforts to ease concerns triggered by a widening mortgage-payment boycott on unfinished houses.
A growing number of home buyers across China threatened to stop making mortgage payments for stalled property projects, aggravating a real-estate crisis that has already hit the economy.
The turmoil rattled metal markets last week. Benchmark 62%-grade iron ore’s spot price for the China-bound material dropped to $100 a tonne on Friday, the weakest since November, based on SteelHome consultancy data.
“Weak property sales and the fall in new home prices for 10 consecutive months...amplified pressure on China’s property developers,” said Commonwealth Bank of Australia analyst Vivek Dhar. China’s property sector accounts for about a quarter of the domestic steel demand.
COVID-19 flare-ups in the country is also a recurring concern, with the financial hub Shanghai city holding mass testing over July 19-21.
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