Singapore iron ore hits 9-month high on bets of aid to China property market

Iron ore futures rose fora third consecutive session on Wednesday, driven by persisting optimism about additional support to China’s property market, though a softening steel market limited gains in the morning session.

The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 1.53% higher at 993.5 yuan ($137.77) a metric ton, the highest since Nov. 15.

The benchmark December iron ore on the Singapore Exchange rose 1.04% to$134.65 a ton, the highest since Feb. 21.

China’s government advisers call for a steady growth target in 2024 when more fiscal policy support is expected to keep long-term development goals on track, Reuters reported.
Chinese regulators are drafting a list of 50 real estate developers eligible for funding, Bloomberg News reported on Monday, citing people familiar with the matter.

“This could help steel demand from the construction sector to stabilise, although a seasonal decline in construction activity will act as a constraint,” analysts at ANZ Bank wrote in a note.

Analysts warned of potential risks in iron ore prices, citing the possibility of increased supervision by authorities following the recent price rally.

Other steelmaking raw materials extended price falls, with coking coal and coke on the DCE down 1.19% and 0.79%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were mostly lower. Rebar shed 0.45%, wire rod slid 1.73%, stainless steel slipped 1.45% while hot-rolled coil added 0.17%.

“Steel fundamentals are not very supportive as the destocking has slowed down,” analysts at SinosteelFutures said.

The weakness in the futures market came despite some Chinese steelmakers raising their spot prices by between 50 yuan and 200 yuan a ton.

Downstream consumers have showed resistance to higher steel prices as demand slowed seasonally, while production picked up amid improved profitability, analysts at Everbright Futures wrote in a note.
Source: Reuters (Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Mrigank Dhaniwala and Dhanya Ann Thoppil)