BEIJING- Iron ore futures prices rebounded on Thursday, as news of authorities in top consumer China considering government purchases of unsold homes lifted both investor sentiment and the demand outlook for the key steelmaking ingredient.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.05 percent higher at 868 yuan ($120.29) a metric ton.
The benchmark June iron ore on the Singapore Exchange was 1.1 percent higher at $114.95 a ton.
China is considering a plan for local governments nationwide to buy millions of unsold homes, Bloomberg News said on Wednesday, citing sources.
Linan district in the eastern city of Hangzhou issued a notice on Tuesday that the local government will purchase new apartments from private developers for public rental housing.
“We believe this year’s peak demand will last from second half of April to the end of May, supporting ore prices,” said Pei Hao, a Shanghai-based analyst at international brokerage Freight Investor Services (FIS).
“Lending support is also a weaker US dollar. But the thin steel margins may prevent prices from rising significantly.”
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 0.99 percent and 0.55 percent, respectively.
