Iron ore prices in China hit a three-week high on Monday, supported by optimism about improving demand after top consumer China announced support to the property market.
The most-traded May iron ore on China’s Dalian Commodity Exchange climbed 1.2% to 1,000 yuan ($139.22) per metric ton, as of 0540 GMT. Earlier in the session, it hit 1,006 yuan, the highest since Jan. 8.
On the Singapore Exchange, the most active March iron ore advanced 1.1% to $135.35 a ton.
China last week said it was widening the uses for commercial property lending by banks in its latest effort to ease a liquidity crunch facing troubled real estate firms.
The property sector accounts for a large portion of consumption of steel and steel-making commodities.
China also announced a deep cut in the amount of cash banks hold as reserves to increase liquidity in the economy and boost growth.
“Iron ore futures rallied after Chinese regulators offered more financial support for struggling property developers,” said ANZ analysts in a note.
Meanwhile, iron ore consumption also benefited from the improving profits at steel mills, said broker Huatai Futures in a note.
Steel inventories at major Chinese steel mills rose for a second consecutive week to 15.4 million tons in mid-January, up 6.7% compared to early January, according to data from the China Iron and Steel Association.
The most-active May rebar contract was nearly flat at 3,970 yuan a ton, hot-rolled coil eased 0.2% to 4,092 yuan, wire rod rose 0.2% to 4,167 yuan, and stainless steel dropped 1% to 14,135 yuan.
Other steelmaking ingredients Dalian coking coal shed 1.1% to 1,784 yuan a ton, and coke shed 1.2% to 2,449.50 yuan.
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