Iron ore rose for a fifth day as Chinese authorities increased economic support aimed at stimulating the crucial construction and property industries.
(Bloomberg) — Iron ore rose for a fifth day as Chinese authorities increased economic support aimed at stimulating the crucial construction and property industries.
Prices of the steelmaking material have rallied about 8% this week, reflecting optimism for infrastructure demand amid a seasonal pick up in construction that usually lasts until the end of October. Fresh positive signs include data showing new home prices in August rose in 17 cities, while China’s central bank injected cash into markets for the 10th consecutive month and cut lenders’ reserve requirements for the second time this year.
Iron ore stockpiles at ports have fallen to their lowest in more than three years, according to data from Steelhome.
Output of steel products ramped up 11% in August compared to a year earlier, signaling robust demand for iron ore.
Steel fundamentals are showing a seasonal pick up, with strong cost support and exports maintained while overall inventory levels are low, Huatai Futures said in a note.
Iron ore jumped 1.7% to $122.70 a ton in Singapore at 2:35 p.m. local time after touching $123.10 earlier, the highest since April 3. Futures in Dalian climbed 1.3%, while rebar and hot-rolled coil rose in Shanghai.
Still, some analysts remain skeptical that iron ore’s rally can be sustained. Capital Economics warned in a note that prices “will soon go into reverse” and slump back below $100 a ton.
Meanwhile, copper was heading for its biggest weekly increase in two months, and was 0.8% higher at $8,487.50 a ton on the London Metal Exchange. Aluminum edged lower.
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