BHP

Iron ore extends gain on China's property sector support, supply worry

Credit: REUTERS/CHINA STRINGER NETWORK

BEIJING, Nov 21 (Reuters) - Iron ore futures extended gains for a second session on Tuesday, as sentiment was boosted by Beijing's latest support to the property sector and lingering concerns over possible supply disruptions.

The most-traded January iron ore on China's Dalian Commodity Exchange (DCE) DCIOcv1 added 2.6% to 985 yuan ($136.59) a metric ton, as of 0238 GMT.

The benchmark December iron ore SZZFZ3 on the Singapore Exchange rose 1.95% to $133.65 a ton, as of 0249 GMT.

Chinese regulators are drafting a list of 50 real estate developers eligible for a range of funding, Bloomberg News reported on Monday, citing people familiar with the matter.

China's CSI 300 Real Estate Index .CSI000952 climbed over 3% in the morning session.

Driving up prices of the key steelmaking ingredient is also lingering concern over near-term disruption of supply after news that around 400 train drivers for BHP's BHP.AX Western Australian iron ore division will begin industrial action late this week.

Other steelmaking ingredients also advanced, with coking coal DJMcv1 and coke DCJcv1 on the DCE up 0.34% and 0.54%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were stronger. Rebar SRBcv1 climbed 2.15% to 4,037 yuan a ton, hot-rolled coil SHHCcv1 rose 1.04%, wire rod SWRcv1 strengthened 1.09% while stainless steel SHSScv1 edged down 0.29%.

"The production restrictions in Tangshan contributed to strengthening steel market, with the strength permeating into the raw materials markets as well," said Cheng Peng, a Beijing-based analyst at Sinosteel Futures.

A few northern cities including top steel production hub Tangshan implemented a level 2 emergency response from Sunday following a heavy air pollution forecast.

Local steel mills are typically required to curb production amid the emergency actions.

Steel prices are unlikely to drop significantly amid higher raw materials prices, analysts at Maike Futures said in a note.

($1 = 7.2111 Chinese yuan)

(Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Mrigank Dhaniwala)

((Amy.Lv@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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