Iron Ore Prices Rise Amid Chinese Demand and Real Estate Moves
Iron ore prices climbed for a second session on Wednesday, driven by Chinese market purchases and real estate support expectations.
The September iron ore contract on the Dalian Exchange rose 3.4% to 826 yuan ($113.67) per ton. In Singapore, the July contract increased 3.8% to $107 per ton.
Short-term demand for iron ore, crucial in steelmaking, remains robust. Iron ore is more cost-effective than steel scrap, another steelmaking material.
Transaction volumes at major Chinese ports grew by 9.3% from Monday to 1.09 million tons on Tuesday, as per Mysteel consultancy.
Beijing announced on Wednesday a reduction in the minimum down payment for first-time homebuyers to 20%.
Futures analysts, noted that investors are speculating on further economic stimuli expected in July.
The third plenum, a significant upcoming meeting in China, will focus on deepening reforms and promoting modernization.
This anticipation has led traders to close short positions, indicating confidence in stable or rising prices.
Between June 11 and June 20, daily crude steel output fell by 2.8% to 2.19 million tons, according to the China Iron and Steel Association.
Some steel mills using electric arc furnaces have cut production due to increasing losses, contributing to the output decline.
The broader context includes China’s efforts to stabilize its economy and support key sectors like real estate and steel.
The rising iron ore prices reflect both current demand and future economic optimism.
These developments are critical as they indicate China’s approach to balancing economic growth and sectoral health amid global economic uncertainties.
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