Iron ore prices surged for a fifth straight session on Monday, as top consumer China’s latest property stimulus and a raft of monetary easing policies brightened the key steelmaking ingredient’s demand outlook.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) jumped 9.5% to 812.5 yuan ($115.83) a metric ton, as of 0304 GMT, after touching 835 yuan, the highest since July 16, in early trade.
The benchmark November iron ore on the Singapore Exchange surged 8.53% to $110.85 a ton after hitting an intraday high at $113, also the highest since July 5.
Both benchmarks posted gains of more than 10% last week.
China’s central bank on Sunday said it would tell banks to lower mortgage rates for existing home loans before Oct. 31, as part of sweeping policies to support the country’s beleaguered property market, the largest steel consumer.
Moreover, the three big cities – Guangzhou, Shenzhen and Shanghai – lifted key home purchase restrictions.
“Efforts to reduce inventory of unsold property will significantly shorten the time to when new construction activity will emerge,” ANZ analysts said.
This came after Beijing unveiled its biggest stimulus since the pandemic last Tuesday and lowered interest rates last Friday to pull the economy out of its deflationary funk and back toward the government’s growth target.
China property developers gained, with the mainland’s CSI 300 Real Estate index jumping around 9%.
Supporting the persistent upward momentum was also lingering expectation of strong fiscal stimulus ahead in the world’s second-largest economy, said analysts.
($1 = 7.0143 Chinese yuan)
(Reporting by Amy Lv and Colleen Howe; Editing by Sumana Nandy)
