BEIJING: Prices of iron ore futures extended climb for a third session on Thursday, buoyed by top consumer China’s latest efforts to spur its struggling property market, although weak industrial data and caution on high portside stockpiles capped gains.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded nearly 2% higher at 825 yuan ($113.51) a metric ton, as of 0235 GMT. The benchmark July iron ore on the Singapore Exchange shed early gains to trade flat at $106.65 a ton. China’s capital city Beijing announced steps on Wednesday to reduce the cost of buying a home, including cutting mortgage interest rates and the minimum down-payment ratio, to try to boost the local property market.
Expectations of near-term resilient demand acted as tailwinds to prices of the key steelmaking ingredient, according to analysts. Average daily hot metal output in July is expected at about 2.37 million tons based on current production and maintenance plans, meaning that ore demand will be relatively rigid, analysts at Everbright Futures said in a note.
Additionally, “traders may also have been buoyed by a Hong Kong court’s decision to adjourn Chinese (property) developer Shimao Group Holdings liquidation hearing to July, giving it more time to refine its debt restructuring plan,” ANZ analysts said in a note.
But gains narrowed after official data showed that China’s industrial profit rose at a much slower pace in May, underlining the struggles faced by the world’s second-largest economy as weak domestic demand crimps overall growth.
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