BEIJING: Iron ore futures were set for a fourth straight weekly gain on Friday, aided by China’s new measures to shore up its troubled property sector and boost confidence, although higher inventories and concerns over a Chinese steel output cap limited gains.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) traded 0.3% higher at 844 yuan ($116.16) a metric ton, as of 0244 GMT.
The benchmark September iron ore on the Singapore Exchange was 0.1% higher at $116.45 a metric ton, as of 0234 GMT.
China’s central bank and financial regulator on Thursday issued notices to ease some borrowing rules to aid homebuyers, including lowering the existing mortgage rate for first-home buyers and the down payment ratio in some cities, in the latest efforts to revive a crisis-hit property market.
The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 51.0 in August from 49.2 in July, beating analysts’ forecasts of 49.3 and marking the highest reading since February.
China will continue to cap steel output this year, the general manager of state-owned Baoshan Iron & Steel said on Thursday in a briefing on its first-half earnings.
Portside iron ore inventories rose 942,800 tons on the week to 121.27 million tons as of Sept. 1, data from consultancy Mysteel showed.
Other steelmaking ingredients jumped on fears of reduced supply following the latest safety checks on coal mines, with coking coal and coke on the DCE surging 6.09% and 4%, respectively.
“Fears of reduced supply (of coal) due to the safety checks prompted some investors to build long positions, betting to garner gains after a further price rise later,” said a North China-based analyst, requesting anonymity as he is not authorised to speak to media.
Steel benchmarks on the Shanghai Futures Exchange were stronger on higher raw materials costs and expectations of improved demand in September, analysts said.
Rebar added 0.99%, hot-rolled coil climbed 1.71%, wire rod advanced 1.48% and stainless steel grew 0.51%.
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