Iron ore futures soared on Monday, extending a rally fueled by hopes of an economic recovery in China, the world’s biggest steel producer and consumer, in the third quarter.
The market was also influenced by the prospect of supporting China’s struggling real estate sector.
The top-traded ore contract for September delivery on China’s Dalian Commodity Exchange ended trading up 7.1% at 711 yuan ($105.27) a tonne after hitting 723.50 yuan early, the highest level since July 14th.
The August ore contract on the Singapore Stock Exchange rose 2.2% to $105.40 a tonne.
China will make “great efforts” to consolidate its economic recovery, particularly in the third quarter, prioritizing stabilizing employment and prices, state media reported on Friday after a cabinet meeting.
“The market is looking forward to the economic recovery in the third quarter,” analysts at Zhongzhou Futures said in a note.
China’s economic growth slowed sharply in the quarter ended in June, having been hit hard by Covid-19 lockdowns that dampened overall demand and brought activity to a halt.
Chinese steel futures also added to their gains after reports that China planned to set up a real estate fund worth up to 300 billion yuan to support more than a dozen real estate developers.
Rebar on the Shanghai Futures Exchange rose 0.8%, hot-rolled coil gained 1.6%, and stainless steel advanced 1.2%.
Source: CNN Brasil
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