Singapore iron ore at 8-month high on China support for property sector
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IRON ore futures rose for a second session on Tuesday (Nov 21), with the Singapore benchmark hitting an eight-month high, as sentiment was boosted by Beijing’s latest support for the property sector and concerns lingered over possible supply disruptions.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 1.93 per cent higher at 978.5 yuan (S$183.50) a metric ton, the highest since Nov 15.
The benchmark December iron ore on the Singapore Exchange rose 1.34 per cent to US$132.85 a ton, as of 0707 GMT, the highest since Mar 15.
Chinese regulators are drafting a list of 50 real estate developers eligible for a range of funding, Bloomberg News reported on Monday, citing people familiar with the matter.
China’s CSI 300 Real Estate Index climbed nearly 2.5 per cent.
“We expect Beijing may eventually have to play the role of lender as last resort to rescue some major troubled developers and fill the vast funding gap for building and delivering those presold homes,” analysts at investment bank Nomura said in a note.
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The market was also concerned about possible near-term supply disruption after news that around 400 train drivers for BHP’s Western Australian iron ore division will begin industrial action late this week.
Other steelmaking ingredients were weaker, with coking coal and coke on the DCE falling 2.74 per cent and 1.59 per cent, respectively.
Steel benchmarks on the Shanghai Futures Exchange gave up some earlier gains, with analysts attributing the rise to output curbs in top production hub Tangshan.
Rebar ticked up 0.78 per cent, hot-rolled coil edged down 0.12 per cent, wire rod was little changed and stainless steel shed 0.97 per cent.
A few northern cities including Tangshan implemented a level 2 emergency response from Sunday following a heavy air pollution forecast. Local steel mills are typically required to curb production during emergency actions.
“Lending support to the steel market is further support for the property market as well as continuous destocking on steel products,” said Chu Xinli, a Shanghai-based analyst at China Futures. REUTERS
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