The iron ore price continued to rise on Thursday, buoyed by improved sentiment towards China’s property sector.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange ended daytime trading 1.8% up at 611.50 yuan ($95.74) a tonne, after touching 629 yuan earlier in the session, its highest level since November 2.
Benchmark 62%-grade iron ore’s spot price in China jumped to $100.50 a tonne.
“Iron ore futures rallied on expectations of a turnaround in the demand outlook,” commodity strategists at ANZ wrote in a note.
“Markets have been buoyed by strong Chinese announcements, including more support for its property sector.”
Some Chinese banks had been told by financial regulators to issue more loans to property firms for project development, Reuters reported on Monday citing two banking sources, in efforts to marginally ease liquidity strains across the industry.
“In the short term, the property-related policy is expected to see improvement, which could probably lift market sentiment,” Galaxy Futures wrote in a note.
Debt-laden China Evergrande Group recently resumed construction of 63 projects in the southern Pearl River delta, while Country Garden Services Holding raised HK$8 billion ($1 billion) in a share sale.
Apparent demand for five main steel products, including rebar, wire rod and hot-rolled coils, gained for two consecutive weeks and was up 4.2% last week from early-November, data from Mysteel consultancy showed.
Concerns about the debt problems of Chinese property developers, a sector that accounts for about a quarter of the domestic steel demand, had recently added downward pressure on prices of iron ore in the world’s biggest steel producer.
(With files from Reuters)