Home / Commodities / Commodity News / Iron ore edges up on China infrastructure, property support hopes

Iron ore edges up on China infrastructure, property support hopes

Iron ore prices edged higher on Monday, extending last week’s solid gains and spurred by hopes of increased infrastructure spending and prospects of property sector bailouts in China.

Uninspiring factory activity data capped gains, however.

The most-traded iron ore contract on China’s Dalian Commodity Exchange, for September delivery, ended daytime trade 0.8% higher at 787 yuan ($116.55) a tonne, after touching its strongest level since June 30 at 817.50 yuan.

On the Singapore Exchange, the steelmaking ingredient’s September contract was up 1.2% at $116.40 a tonne at 0718 GMT, off a session high of $120.95.

China has urged local governments to speed up the use of special bonds for infrastructure that is mature and profitable, state media reported on Friday, following a cabinet meeting.

Fitch Ratings said it expected the Chinese government to roll out more financial support to boost infrastructure investment.

Iron ore’s gains last week were partly driven by reports that China was planning to help property developers by issuing 1 trillion yuan ($148 billion) in loans for stalled developments. Beijing is trying to revive the debt-stricken sector and relieve pressure on the economy.

“Attention will remain fixated on signs of any further property sector bailouts,” Navigate Commodities Managing Director Atilla Widnell said.

“While positive property sector-related headlines will no doubt create temporary upside shocks, iron ore futures should be undermined by negative fundamentals.”

Data on Monday showed slower growth in July for Chinese factory activity, tempering market optimism about demand prospects in the world’s biggest steel producer.

Widnell said further steel production cuts expected in the second half of 2022 in China could drive an industry “supply and demand rebalancing act”.

Construction steel rebar on the Shanghai Futures Exchange SRBcv1 rose 2% and hot-rolled coil SHHCcv1 climbed 1.4%. Stainless steel SHSScv1 advanced 3.5%.

Dalian coking coal DJMcv1 was up 0.4% and coke DCJcv1 added 3.4%.
Source: Reuters (Reporting by Enrico Dela Cruz in Manila; editing by Uttaresh.V and Bradley Perrett)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping