Iron ore futures are holding steady, with markets seemingly looking past ongoing weakness in China’s property sector, according to ANZ. Prices have surged more than 20 per cent since June, reaching a one-year high. This increase has been largely driven by improving sentiment in China’s steel market.
ANZ reports that recent data indicates China’s economy remains robust, with first-half GDP growth at 5.3 per cent and industrial fixed asset investment up 6.4 per cent. While the property sector faces headwinds, the steel market’s improved sentiment has sustained the gains in iron ore prices.
According to ANZ, a pullback in steel output in recent months has improved profitability in the sector. Margins for steel mills have pushed back into positive territory, reaching as high as USD150 per tonne in recent weeks. This has provided some breathing space for iron ore prices to push higher, supporting the current market levels.
Despite the overall positive sentiment, Singapore iron ore futures experienced a slight dip, falling 1.1 per cent to $US102.35 per tonne. However, the underlying strength in China’s steel market continues to provide a buffer against more significant price declines.
