Iron ore rises on pre-holiday restocking, China stimulus hopes
"Winter restocking of iron ore among steel mills is still underway, so we believe ore prices will find some support in the near term," analyst says.
Iron ore futures prices rose for a fourth straight session on Wednesday to their highest level in four weeks, supported by firm near-term demand in top consumer China and lingering expectations of more stimulus in coming weeks.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade nearly 2.6% higher at 864 yuan ($118.79) a metric ton, a level not seen since June 3.
The benchmark August iron ore on the Singapore Exchange jumped 3.1% to $113.35 a ton, as of 0728 GMT, the highest since June 7.
“The positive signals from the property sector stimulus have improved market sentiment and helped drive ferrous prices up,” analysts at Huatai Futures said in a note.
Beijing has unveiled a flurry of stimulus measures to revive its beleaguered property market, the largest steel consumer.
“Hot metal output among steelmakers stayed high and the lower arrivals of steel scrap also underscored solid ore demand,” Huatai analysts added.
Transaction volumes of portside iron ore climbed by nearly 28% from Monday to 1.12 million tons on Tuesday, data from consultancy Mysteel showed.
“While the stabilizing macroeconomic outlook provided some support, the market still expects more policy support in the upcoming Third Plenum meeting to revive the property sector,” ANZ analysts said in a note.
The third plenum will be held from July 15 to 18, focusing on deepening reforms and promoting the modernization of China.
Shares in Hong Kong-listed Chinese property companies surged on Tuesday, after private data showed yearly sales declines for major Chinese property developers continued to narrow in June.
Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.4% and 2.1%, respectively.
Steel benchmarks on the Shanghai Futures Exchange posted gains. Rebar and wire rod rose nearly 1.5%, hot-rolled coil added 1.2%, and stainless steel gained nearly 0.4%.
($1 = 7.2734 Chinese yuan)
(By Amy Lv and Mei Mei Chu; Editing by Subhranshu Sahu and Janane Venkatraman)
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