Iron ore rises to one-week high as property support revives demand outlook
BEIJING, Aug 21 (Reuters) -Prices of iron ore futures climbed on Wednesday to their highest levels in a week, as supportive property measures in top consumer China revived hopes of improved demand in the coming months.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 was up 2.54% at 727.5 yuan ($102.00) a metric ton, as of 0305 GMT, the highest level since Aug. 14.
The benchmark September iron ore SZZFU4 on the Singapore Exchange jumped 2.09% to $97.5 a ton, its highest level since Aug. 14.
"At least 10 city governments in China have relaxed or scrapped new-home price guidelines to let market demand play a bigger role," ANZ analysts said in a note.
"Beijing is also said to be considering a new funding option for local governments to buy unsold homes."
Chinese property company Kaisa Group 1638.HK on Tuesday announced an offshore debt restructuring agreement with a key group of bondholders.
The signs of stabilizing in rebar due to improved fundamentals boosted sentiment in the ore market as well, analysts at Everbright Futures said in a note.
However, the cost competitiveness of steel scrap against iron ore may curb appetite for ore, capping price gains, analysts said.
Other steelmaking ingredients on the DCE advanced, with coking coal DJMcv1 and coke DCJcv1 up 2.22% and 1.8%, respectively.
Steel benchmarks on the Shanghai Futures Exchange continued uptrends. Rebar SRBcv1 gained 1.2%, hot-rolled coil SHHCcv1 added 2.48%, wire rod SWRcv1 inched 0.7% higher and stainless steel SHSScv1 edged up 0.47%.
"The recent wave of rebar price gain is mainly driven by expectations of improved demand in September and October, coupled with low output and stocks," analysts at Jinrui Futures said in a note.
"Also, the expectation of possibly insufficient deliverable cargoes after the old standards rebar cannot register standard warrants also played a role in higher prices."
The Shanghai bourse said last month that rebar and wire rod produced under old standards cannot be used to register standard warrants from Aug. 19. nL1N3JL0EN
($1 = 7.1323 Chinese yuan)
Reporting by Amy Lv and Mei Mei Chu; Editing by Sherry Jacob-Phillips
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