Iron ore prices in China posted gains on Wednesday, with the market jumping to a one-week high on prospects for strong Chinese demand ahead of the peak of the construction season.
The most-traded iron ore on the Dalian Commodity Exchange closed up 2.7% at 716 yuan ($104.35) a tonne, while the most active rebar contract on the Shanghai Futures Exchange gained 1.5%. , at 4,086 yuan per tonne.
Both contracts hit their highest level since August 17.
More measures by China to support the struggling local real estate sector provided further support for prices.
China on Monday cut benchmark lending rates and lowered benchmark mortgages to boost its economy hit by Covid-19 outbreaks and a housing crisis.
“Iron ore futures gained after additional measures to support China’s real estate sector,” the ANZ said in a note.
“The government is making moves to help the industry, including offering 200 billion yuan in special loans to complete unfinished projects.”
China plans to offer 200 billion yuan in special loans to troubled developers, Bloomberg reported on Monday, citing people familiar with the matter.
There were signs of a possible reduction in iron ore inventories this week, with Mysteel data showing China’s port inventories down 0.3% on the week to 138.6m tonnes on Monday.
However, the long-term outlook remained hazy as the resurgence of Covid-19 cases and the slowing global economy continued to weigh on steel demand.
Source: CNN Brasil
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