Iron ore futures hit an over three-month high on Wednesday as investors bet on better demand following China’s property support, despite ample stocks in the world’s top consumer.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) was up 2.5% to 919 yuan ($126.95) a metric ton by 0504 GMT, its highest since Feb. 20.
The contract has gained for five consecutive sessions.
The benchmark June iron ore on the Singapore Exchange rose 0.8% to $121.8 a ton.
China last Friday announced “historic” steps to stabilize its crisis-hit property sector, with the central bank facilitating 1 trillion yuan ($138 billion) in extra funding and easing mortgage rules, among others.
The property sector is a major consumption pillar for steel and has raised investors’ prospects for steelmaking ingredients.
The futures rally was mainly due to positive macro sentiment, but fundamentals lagged with plenty of available supply in the spot market, an iron ore trader said.
Iron ore inventory at major Chinese ports assessed by information provider Mysteel stood at 147.4 million tons, up 6% from the beginning of March.
Other steelmaking ingredients on the DCE climbed, with coking coal advancing 4.6% and coke up 4.4%.
Steel benchmarks on the Shanghai Futures Exchange were mostly up. Rebar rose 1.5%, hot-rolled coil added 1.1%, wire rod up 2.2%, while stainless steel eased 0.1%.
($1 = 7.2391 yuan)
(By Siyi Liu and Colleen Howe; Editing by Rashmi Aich and Sohini Goswami)
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