SINGAPORE: China’s iron ore prices gained more ground on Wednesday, with the market jumping to a one-week high on prospects of strong Chinese demand ahead of the peak construction season.

The most-traded iron ore on the Dalian Commodity Exchange closed up 2.7% at 716 yuan ($104.35) a tonne and the Shanghai Futures Exchange’s most-active rebar contract gained 1.5% at 4,086 yuan a tonne. Both contracts touched their highest since Aug. 17.

More measures from China to support its beleaguered property sector lent further support. China on Monday cut benchmark lending rates and lowered the mortgage reference by a bigger margin to boost its economy hurt by COVID-19 outbreaks and a property crisis.

“Iron ore futures gained following the additional support measures for China’s beleaguered property sector,” ANZ said in a note. “The government is making moves to aid the sector, including offering 200 billion yuan in special loans to complete unfinished projects.”

China is planning to offer 200 billion yuan in special loans to troubled developers, Bloomberg reported on Monday, citing people familiar with the matter.

There were signs of possible iron ore inventory drawdown this week, with Mysteel data showing portside stockpiles in China down 0.3% week-on-week to 138.6 million tonnes on Monday.

However, the longer-term outlook remained cloudy as a resurgence of COVID-19 cases and a slowdown in the global economy continued to weigh on steel demand.

ShFE hot-rolled coil rose 2% to 4,008 yuan a tonne, stainless steel climbed 0.7% to 15,465 yuan a tonne, Dalian coking coal fell 0.4% to 1,948 yuan a tonne and coke added 0.3% at 2,589.50 yuan a tonne.