The iron ore price extended its rally on Wednesday, as traders clung to hopes that recent policy actions in China will spur demand.
Overall sentiment remained upbeat despite October data showing new home prices fell at their fastest pace since 2015. Steel futures and other steelmaking inputs in China also advanced.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $97.53 a tonne Wednesday morning, up 1.7%.
The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade 2.2% higher at 734 yuan ($103.74) a tonne. It stretched gains during afternoon trade to hit 741 yuan, its highest since October 11.
“Short-term (trading) is dominated by emotions,” Sinosteel Futures analysts said in a note.
Despite the current outbreak of covid-19 infections, Dalian iron ore has rallied nearly 20% this month after a rout in October.
Even as October economic indicators pointed to the world’s second-largest economy slowing down due to covid-19 curbs and a slowdown in the property sector, news of a rescue package for ailing Chinese developers boosted the upbeat mood.
Some market participants may be speculating that China could roll out more measures to support its economy, some analysts said.
(With files from Reuters)