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Iron ore futures climbed on Monday to hit their highest in more than a month, as top steel producer China vowed to keep fine-tuning its COVID-19 containment rules and laid out support measures for the struggling domestic real estate sector.
Following Friday’s easing measures, a Chinese Center for Disease Control and Prevention researcher said further adjustments in quarantine measures would not be ruled out.
On Sunday, Reuters reported that the People’s Bank of China and the China Banking and Insurance Regulatory Commission had outlined 16 steps to support property developers in a notice to financial institutions.
The most-traded January iron ore on China’s Dalian Commodity Exchange DCIOcv1 ended daytime trade 1.9% higher at 710.50 yuan ($100.85) a tonne, after earlier hitting its highest since Oct. 11 at 735.50 yuan.
On the Singapore Exchange, the steelmaking ingredient’s benchmark December contract SZZFZ2 rose as much as 5.2% to $96 a tonne, its strongest since Sept. 28.
“The moves will clearly provide some support to China’s economy, though have to be factored in against the rising COVID case numbers being seen across the country,” said Robert Carnell, ING Asia-Pacific head of research.
Market moves remained largely driven by sentiment, with weak fundamentals ignored, including rising iron ore inventories.
China’s iron ore port stockpiles climbed steadily for four weeks to hit 136 million tonnes on Friday, SteelHome consultancy data showed, as poor margins prompted steel mills to curb output.
“Negative data, fundamentals and news flow appear to be heavily discounted with markets scouring for positive signs of an eventual China ‘COV-exit’,” said Navigate Commodities Managing Director Atilla Widnell.
Dalian coking coal DJMcv1 and coke DCJcv1 rose 1.6% and 2.1%, respectively.