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Iron ore prices recovered on Wednesday as sentiment was boosted following aspeech by China’s central bank governor on support for the property market, the country’s biggest steel consuming sector.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 1.03% higher at 935 yuan ($128.46) a metric ton.
The benchmark December iron ore on the Singapore Exchange was 1.09% higher at $124.4 a ton, as of 0736 GMT, the highest since April 3.
Pan Gongsheng, China’s central bank governor, said spillover effect of property market adjustments on the financial system are generally manageable and will guide financial institutions to keep stable financing channels open through property credit and bonds, state media reported.
Sentiment was also bolstered following a Reuters report that Chinese authorities have asked Ping An Insurance Group 2318.HK to take a controlling stake in embattledCountry Garden 2007.HK, the nation’s biggest private property developer.
Ping An 601318.SS denied to have been approached by the government.
Prices shrugged off earlier losses due to lingering risk-off sentiment.
“Fears of enhanced government supervision on the market weighed on prices, especially after latest moves made by the Dalian bourse,” said Chu Xinli, a Shanghai-based analyst at China Futures.
The DCE announced on Monday it would limittrading volumes and adjust up trading fee rates for some futures contracts of the key steelmaking ingredient.
“More production cuts might not be seen amid improved steel margins, indicating ore demand won’t shrink significantly in the near term, supporting prices,” Chu added.
Other steelmaking ingredients on the DCE alsoposted gains, with coking coal DJMcv1 and cokeDCJcv1 up 2.43% and 1.41%, respectively.
Higher raw materials prices drove up steelbenchmarks on the Shanghai Futures Exchange. Rebar SRBcv1 added 1.29%, hot-rolled coil SHHCcv1 rose 1.18%, wire rod SWRcv1 climbed 0.57%.
Stainless steel SHSScv1 fell 0.89%.