Iron ore price eyes fifth weekly gain despite China intervention

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.61% higher at 986.5 yuan ($136.80) a metric ton.

The benchmark December iron ore on the Singapore Exchange climbed 0.88% to $134.35 a ton, following a 1.15% drop in the previous session.

The persistent strength in the price of the key steelmaking feedstock came after moves by Beijing to revive its debt-ridden property sector, the country’s largest steel consumer.

China may allow banks to offer unsecured short-term loans to qualified property developers for the first time, Bloomberg News reported on Thursday.

This came after Chinese regulators are reportedly drafting a list of 50 real estate developers eligible for funding.

This has offset some losses following the latest government intervention.

China’s state planner said it would closely monitor changes in the iron ore market and further tighten supervision of spot and futures trading in its latest effort to curb a price rally, leading to a price drop on Thursday.

“Iron ore prices are likely to consolidate in the short run amid the joint impact of favorable and unfavorable factors,” analysts at Everbright Futures said in a note.

Other steelmaking ingredients strengthened on supply disruptions, with coking coal and coke on the DCE up 3.87% and 3.29%, respectively.

Some coal mines in Lvliang city in north China’s Shanxi province, its top coal production hub, temporarily suspended production due to intensified safety checks, consultancy Mysteel said, fanning concerns about reduced supply in the near term.

Steel benchmarks on the Shanghai Futures Exchange were driven up by higher raw materials. Rebar added 0.66%, hot-rolled coil rose 0.85%, wire rod climbed 1.3% and stainless steel gained 0.92%.