SINGAPORE: Dalian iron ore futures snapped a five-day decline on Thursday, reflecting market participants’ optimism over Beijing’s efforts to revitalise the property sector.
The most-traded January iron ore on China’s Dalian Commodity Exchange rose 0.1% to 957.5 yuan ($134.43) per metric ton as of 0230 GMT. For the month so far, the benchmark contract has gained 6.86%, and is on track to record its fourth consecutive month of gains.
On the Singapore Exchange, the benchmark January iron ore was up 0.1% at $128.65 a metric ton.
The Price Monitoring Centre of China’s Development and Reform Commission have increased oversight to maintain a healthy iron ore market and control soaring prices, which analysts refer to as “frequent and forceful interventions.” Despite successfully managing prices in the previous five sessions, prices are now staging a rebound.
The optimism on iron ore could further grow if Beijing rolls out more structural reforms. China’s demand for steel in electric vehicles and green infrastructure has already kept average prices high despite the property slump.
Property developer stocks have seen a spectacular rebound. For the month of November, both Country Garden’s Hong Kong shares and Evergrande stocks staged have risen.
Prices of new homes in China are now expected to climb 3% this year after policy measures to support the country’s beleaguered property market, up from earlier expectations for prices to be flat, a Reuters poll showed.
China’s manufacturing activity contracted for a second straight month in November and at a quicker pace, an official factory survey showed on Thursday.
Steel benchmarks on the Shanghai Futures Exchange were mixed. The most-active rebar contract slid 0.5%, hot-rolled coil dropped 0.9%, and wire rod decreased 1.1%. Meanwhile, stainless steel gained 0.8%. Other steelmaking ingredients Dalian coking coal and coke slid 2.5% and 3.2%, respectively.
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