SINGAPORE: Dalian iron ore futures dipped on Friday, but Singapore iron ore futures recovered as traders weighed hopes of more substantial aid for China’s property sector against fears of slowing steel output.

The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade 0.8% lower at 725.5 yuan ($101.03) per metric ton. On the Singapore Exchange, the benchmark September iron ore was up 1.6% at $102.4 a ton, as of 0720 GMT, snapping a three-day losing streak.

China’s central bank has been in discussion with local property developers for ways to better support the sector financially and the market has bought into this with a recovery rally, said Atilla Widnell, managing director at Navigate Commodities in Singapore. China’s Zhengzhou city launched measures to support its property market, the first of such moves by a big city heeding signals from policymakers, while the central bank governor pledged on Thursday to guide more financial resources towards the private economy.

These are the latest in a series of policy measures in recent weeks to support the economy as its post-pandemic recovery falters. However, Widnell said the firm was not hopeful that funds would actually be diverted to steel-intensive property construction and infrastructure projects, since companies have “acted rather opportunistic” this year for fear of becoming the next Evergrande. Flooding in Hebei from record rainfall also added to market worries about slowing local steel production.

Meanwhile, inventories of the five major steel items held by traders across China rose 2.1% between July 28 and Aug. 3 for a sixth straight weekly gain, a Mysteel survey showed on Thursday.

The most-active rebar contract on the Shanghai Futures Exchange fell 0.6%, hot-rolled coil slid 0.2%, wire rod grew 1.2%, and stainless steel climbed 0.8%.

Other steelmaking ingredients, Dalian coking coal and coke dropped 0.7% and 2.3%, respectively.