Posted on 09 Sep 2022
Dalian and Singapore iron ore futures rose on Thursday, supported after the Chinese city of Zhengzhou said it would start building stalled housing projects, offering some relief to markets worried about weak steel demand in China.
Steel futures in Shanghai also advanced, despite concerns about intensifying COVID-19 restrictions in the world’s biggest steel producer and iron ore consumer.
The most-traded January iron ore on China’s Dalian Commodity Exchange DCIOcv1ended daytime trading 3.1% higher at 706 yuan ($101.54) a tonne, after hitting its strongest level since Aug. 30 at 708.50 yuan.
On the Singapore Exchange, the steelmaking ingredient’s benchmark October contract SZZFV2 was up 4.1% at $100.40 a tonne, as of 0700 GMT.
Zhengzhou city vowed to start building all stalled housing projects within 30 days, by making good use of special loans, asking developers to return misappropriated funds, and encouraging some real estate firms to file for bankruptcy, Reuters reported, citing three sources.
Homebuyers in at least 80 cities in China have threatened to halt making mortgage payments as liquidity problems or COVID-19 restrictions hampered projects, adding to worries about an ailing property market.
The resumption of housing projects bodes well for iron ore and steel demand, especially ahead of winter when construction activities in China slow.
“The market is cautiously looking forward to September and October demand,” Zhongzhou Futures analysts said in a note, referring to China’s peak construction season.
Rebar on the Shanghai Futures Exchange SRBcv1 rose 0.9%, while hot-rolled coil SHHCcv1 climbed 0.8%. Stainless steel SHSScv1 gained 1.4%.
Other steelmaking inputs also advanced, with Dalian coking coal DJMcv1 and coke DCJcv1 up 1.6% and 2.2%, respectively.
But COVID-19 curbs may intensify ahead of the ruling Communist Party’s congress in October, analysts said.
Chengdu, capital of the southwestern Chinese province of Sichuan, extended the lockdown of most of its districts on Thursday.
Source:Reuters
