SINGAPORE: Iron ore futures prices rose on Monday as investor sentiment was bolstered by China’s efforts to revive its struggling property market, and an expected wave of restocking from steelmakers after the Labour Day holidays.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 2.63% higher at 896 yuan ($124.21) a metric ton, the highest since March 7.
The benchmark June iron ore on the Singapore Exchange was 2.05% higher at $119.45 a ton, as of 0823 GMT, the highest since April 25.
Beijing said in a politburo meeting on April 30 that it would coordinate and improve policies to clear housing inventory, while private data showed April home sales for major property developers dropped at a slightly slower pace.
Chinese derivatives markets, which were closed on May 1-3 for the May Day holiday, had yet to react to the signals.
“There is some positive change in this meeting content compared to the one held late last-December; the sales of housing inventory will provide substantial help to property developers facing capital strains,” said analysts at China Galaxy Securities in a note.
Beijing also announced “optimised measures” last Tuesday to allow some residents to buy a new flat in outer districts to boost home sales.
The prospect of improved fundamentals thanks to continuously increased hot metal output and falling ore arrivals also lifted sentiment.
“Given an obvious fall in ore arrivals, a turning point in terms of portside stocks is expected to emerge if the production resumption among mills is accelerating in mid-to-late May,” analysts at Yongan Futures said in a note.
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