Iron ore futures on the Dalian and Singapore exchanges rebounded above the $100 mark on Monday (18), after China, the world’s top steel producer, tried to ease concerns related to financial difficulties faced by the real estate sector.
However, lingering fears over Covid-19 limited gains.
The steel ingredient’s August contract on the Singapore Stock Exchange rose 3.7% to $100.05 a tonne, rebounding from an eight-month low of $96 reached on Friday.
On China’s Dalian Commodity Exchange, the top-traded iron ore contract for September ended trading up 2.2% at 679 yuan ($100.63) a tonne after hitting a seven-month low of 638.50 yuan.
Other commodities in China’s ferrous complex have also recovered from recent selloffs.
Construction steel rebar on the Shanghai Futures Exchange rose 2.1%, and hot-rolled coil rose 3.1%.
Chinese regulators on Sunday urged banks to extend loans to qualifying real estate projects and meet developers’ financing needs when reasonable, in their latest efforts to ease concerns sparked by a growing boycott of mortgage payments on unfinished homes.
A growing number of homebuyers across China have threatened to stop making mortgage payments on stalled real estate projects, exacerbating a housing crisis that has already hit the economy.
The turmoil rocked metals markets last week. The reference spot price for 62% iron ore bound for China fell to $100 a tonne on Friday, the weakest level since November, data from consultancy SteelHome showed. On Monday, it rose 0.5 cents to $100.5 a ton.
China’s real estate sector accounts for about a quarter of domestic steel demand.
Source: CNN Brasil
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