Iron ore futures prices rose on Friday and advanced for the week, helped by the latest housing stimulus and resilient demand for the key steelmaking ingredient in China, the ore’s biggest consumer market, although persistently high inventories capped gains.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daily trading 0.18% higher at 825 yuan ($113.52) a ton, up 0.5% on a weekly basis.
Benchmark August iron ore on the Singapore Exchange rose 1.09% to $106.4 a tonne, a weekly increase of 1.2% so far.
The Chinese capital, Beijing, has joined three other cities in reducing the cost of buying property by cutting mortgage interest rates and minimum down payment requirements.
“These latest measures could lead to an increase in residential property transactions and help alleviate the worst of the country’s housing oversupply due to the timing of equity releases,” ANZ analysts said in a note.
According to data from consultancy Mysteel, average daily hot metal production among surveyed steelmakers remained at a relatively high level of around 2.39 million tonnes on June 27, despite a weekly decline of 0.2%.
But persistently high port inventories, which rose 0.3 percent to 149.26 million tonnes, limited price increases.
“(China’s) issuance of special bonds has accelerated recently, but there is some change in usage, which could affect the infrastructure sector later,” analysts at GF Futures said in a note. Special bonds are typically used to finance infrastructure projects.
Investors and traders are still seeking more clarity on the market’s direction at the long-delayed third plenary meeting, which will be held from July 15 to 18.
Source: Terra
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