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Iron ore futures in China climbed to near a one-week high on Thursday, on hope of better demand from the property market as China signalled some support to the struggling sector.
The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) closed up 2.4% at 963.50 yuan ($133.90) per metric ton. Earlier in the session, it hit 967.50 yuan, the highest since Feb. 2.
The most-active March iron ore contract on the Singapore Exchange climbed 2.4% to $128 a ton, as of 0804 GMT.
China aims to ramp up financing for home projects in the coming days as part of its support measures. Construction accounts for a majority of steel and iron ore demand.
However, banks’ reluctance to lend to the crisis-hit sector will remain a major obstacle for distressed developers who need fresh funding the most.
“A drop in iron ore inventories at major Chinese steel mills to the lowest in more than two years also stoke optimism that a restocking phase could boost prices once the week-long Lunar New Year holiday is over,” ANZ analysts said in a note.
Other steel-making ingredients such as coking coal DJMcv1 advanced 2.4% to 1,746 yuan a ton, while coke increased 2.5% to 2,378 yuan.
Steel benchmarks on the Shanghai Futures Exchange (SHFE) were mixed.
Rebar SRBcv1 edged up 0.7% at 3,854 yuan a ton, hot-rolled coil advanced 0.6% to 3,984 yuan, wire rod fell 0.2 to 4,052 yuan while stainless steel SHSScv1 rose 0.4% to 13,630 yuan.
The Dalian exchange and the SHFE will be closed for a public holiday in China during Feb. 9-16.