BEIJING: Iron ore futures climbed on Wednesday as investor sentiment was buoyed by prospects of fresh measures from China to prop up its struggling property sector, which is the largest steel consumer in the world’s second-largest economy.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) rose 0.62% to 818 yuan ($112.26) a metric ton, as of 0215 GMT.
The benchmark September iron ore on the Singapore Exchange was 0.6% higher at $112.85 a metric ton, as of 0235 GMT.
Some Chinese state-owned banks will soon lower interest rates on existing mortgages, Reuters reported on Tuesday citing three sources familiar with the matter, as Beijing ramps up efforts to revive the debt crisis-hit property sector and bolster a sputtering economy.
“China announced some measures to support the flailing property sector. These measures have helped broader sentiment in financial markets,” analysts at ING bank said in a note.
Beijing halved the stamp duty on stock trading on Monday to boost its struggling markets.
Other steelmaking ingredients were mixed, with coking coal down 0.2% and coke up 0.18%.
Most steel benchmarks on the Shanghai Futures Exchange posted gains. Rebar advanced 0.27% to 3,688 yuan per ton, hot-rolled coil was little changed, wire rod climbed 1.57% and stainless steel ticked up 0.06%.
“Though prices gained strength thanks to the latest stimulus measures, we still think 3,750 yuan per ton will be a resistance level for (steel) rebar. It’s hard to break through the level in the short run,” said Cheng Peng, a Beijing-based analyst at Sinosteel Futures.
“There is still some pressure from the supply side and also there is no obvious improvement in demand yet.”
The profitability of steel mills has fallen for three consecutive weeks, and some mills may cut production after suffering losses, analysts at Sinosteel said in a note.
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