MANILA: Iron ore futures rose on Thursday, with the Dalian benchmark hitting its highest in more than two weeks, while steel prices also firmed, buoyed by China’s intensified efforts to support the ailing domestic property sector.
Hopes that top steel producer China would ease its COVID-19 restrictions also boosted sentiment. Chengdu city said it would lift a full lockdown on Thursday in all districts still facing strict movement curbs with a recent outbreak now under control. The most-traded January iron ore on China’s Dalian Commodity Exchange ended morning trade 0.8% higher at 723.50 yuan ($103.86) a tonne, after touching its highest since Aug 29 at 736 yuan earlier in the session. On the Singapore Exchange, the steelmaking ingredient’s benchmark October contract was up 0.8% at $101.60 a tonne.
China’s zero-Covid policy and a downturn in the property industry have slowed down the world’s second-largest economy, with new home prices depressed by soft demand as widespread lockdowns dented already weak buyer confidence.
Guangzhou city has allowed property developers to reduce sale prices of homes by as much as 20% compared with 6% previously, financial news outlet Yicai reported.
“China has been stepping up its efforts to support the housing sector, with more Chinese cities announcing credit support and subsidies for home purchases,” ING commodities strategists said in a note. Progress towards a resolution is being made, said Westpac senior economist Elliot Clarke, citing a proposed rescue fund for distressed developers announced in July.
“Along with other initiatives surely in the pipeline, these actions have the capacity to return liquidity and proper functioning to the construction sector and to rebuild confidence,” he said.
Rebar on the Shanghai Futures Exchange rose 0.5%, hot-rolled coil climbed 0.6%, and stainless steel gained 0.7%. Dalian coking coal and coke advanced 3% and 2.9%, respectively.
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