Iron ore logs weekly gain on resilient China demand, property stimulus

Iron ore futuresprices edged up onFriday and logged aweekly rise, thanks to a boost from the latest property stimulus and resilient demand for the key steelmaking ingredient in top consumer China, though lingering high stocks curbed gains.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.18% higher at 825 yuan ($113.52) a metric ton, a rise of 0.5% week-on-week.
The benchmark August iron ore on the Singapore Exchange was 1.09%higher at $106.4 a ton, as of 0750 GMT an increase of 1.2% so far this week.

China’s capital city Beijing has joined three other top-tier cities to reduce the cost of buying a home by cutting mortgage interest rates and the minimum down-payment ratio.

“These latest measures could drive an increase in residential property transactions and help alleviate the worst housing oversupply by inventory-clearance time in the country,” said ANZ analysts in a note.

Average daily hot metal output among steelmakers surveyed hovered at a relatively high level of around 2.39 million tons as of June 27, despite a weekly fall of 0.2%, data from consultancy Mysteel showed.

But persistently high portside inventories, which climbed by 0.3% to 149.26 million tons, capped upside room.

Other steelmaking ingredients on the DCE were mixed, with coking coal DJMcv1 up nearly 0.5%, whilecoke DCJcv1 edged down 0.2%.

Steel benchmarks on the Shanghai Futures Exchange were also mixed. Rebar SRBcv1 lost 0.2%, hot-rolled coil SHHCcv1 were little unchanged, wire rod SWRcv1 dipped 0.5%and stainless steel SHSScv1 added nearly 0.3%.

“The issuance of special bonds has recently accelerated but there is some change regarding the usage, which might influence the infrastructure sector later,” analysts at GF Futures said in a note.

Special bonds are typically used to fund the infrastructure projects.

Investors and traders are still looking for a possible clarity on market directions from a long-delayed third plenum to be held from July 15 to July 18.
Source: Reuters (Reporting by Amy Lv and Mei Mei Chu; Editing by Janane Venkatraman)