BEIJING- Iron ore futures rebounded on Tuesday as a relaxation on house buying in China’s commercial hub Shanghai boosted investor sentiment and brightened demand prospects.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 1.11 percent higher at 911.5 yuan ($125.79) a metric ton, after falling more than 1 percent the day before.
The benchmark June iron ore on the Singapore Exchange was 1.84 percent higher at $121.45 a ton.
Shanghai, a first-tier mega city, has lowered the minimum downpayment ratios for home buyers and relaxed some restrictions, after Beijing unveiled ‘historic’ steps earlier the month to stabilize its crisis-hit property market.
There are expectations that other mega cities will likely follow suit.
The news of Shanghai easing restrictions on home buying has improved sentiment, supporting ferrous market which has recently been driven more by macro sentiment than fundamentals, analysts at Galaxy Futures said in a note.
“The issuance of local government bonds has sped up, and this will likely provide some support for rebar consumption later, but we still lowered forecast of the annual infrastructure investment growth rate to 6 percent -8 percent from 10 percent ,” China International Capital Corporation (CICC) said in a note.
