Iron ore futures prices were stable on Friday but were poised for a second weekly gain, driven by sustained optimism for increased demand in China, the top consumer, fuelled by a series of property stimulus measures.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) concluded daytime trading 0.44% lower at 908 yuan (£125.33) per metric ton, reflecting a week-on-week increase of 2.6%.
The benchmark June iron ore on the Singapore Exchange was up 1% at £120.75 per ton, as of 0738 GMT, marking a 2.9% rise for the week.
“Overall sentiment remained positive, bolstered by the latest property stimulus policies,” analysts at Huatai Futures commented in a note.
Last Friday, China unveiled “historic” measures to stabilise its troubled property sector, aiming to clear inventory and stimulate homebuyer demand, with several cities reducing downpayment and mortgage loan interest rates in response.
Additionally, cash-strapped major property developer China Vanke announced on Thursday that it had secured a 20 billion yuan syndicated loan facility.
Prices of the key steelmaking ingredient experienced downward pressure the previous day and fluctuated within a tight range on Friday as investors and traders reassessed near-term demand prospects following lower-than-expected hot metal output and rising portside stocks.
Average daily hot metal output among surveyed steelmakers halted a seven-week increase, stabilising at 2.37 million tons as of May 24. Meanwhile, portside ore stocks increased by 0.3% over the week to approximately 148.55 million tons, according to data from consultancy Mysteel.
Other steelmaking ingredients on the DCE saw further gains, with coking coal and coke up 1% and 1.39%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar gained 0.19%, hot-rolled coil rose 0.1%, wire rod fell 0.74%, and stainless steel showed little movement. (£1 = 7.2451 Chinese yuan)
Alien Metals Ltd (LON:UFO) is a global minerals exploration and development company that will shortly make the transition to iron ore producer. The company was formed from Arian Silver in late 2018, retaining some of the companies more valuable Mexican projects before embarking on an acquisition led strategy, headed up by an excellent geological team and targeted entirely on Western Australia.
