Iron ore prices passed $130 a ton on Wednesday for the first time since March as China considers a new wave of stimulus to bolster its struggling property sector.
As Bloomberg reported, Beijing plans to provide at least 1 trillion yuan ($137 billion) in low-cost financing to the nation’s urban village renovation and affordable housing programs.
The plan would mark a major step-up in authorities’ efforts to put a floor under the biggest property downturn in decades, which has weighed on economic growth and consumer confidence.
It comes after last month’s move to issue an additional 1 trillion yuan of sovereign bonds this quarter, with the funds partially earmarked for construction.
According to Fastmarkets, benchmark 62% Fe fines imported into Northern China rose 1.38%, to $131.53 per ton.
The property sector accounted for as much 40% of Chinese demand for iron before the real estate downturn.
Expectations for iron ore restocking before February’s Lunar New Year holiday period are also aiding the demand outlook.
Meanwhile, China’s state planning commission said on Wednesday it will work with the Dalian Commodity Exchange to study ways to strengthen market supervision as a response to the recent surge of iron ore prices.
(With files from Bloomberg)