Iron ore spikes 11 per cent after major Chinese cities loosen home curbs
Iron ore spiked at the week’s open after three of China’s biggest cities eased curbs on home-buying, bolstering the demand outlook in the world’s biggest consumer of the steel-making ingredient.
Shanghai, Guangzhou and Shenzhen loosened rules, following through on Beijing’s latest efforts to prop up the embattled property sector. Futures surged by almost 11 per cent to hit the highest since July.
Iron ore — which had been one of the year’s worst-performing major commodities as China’s economy slowed — has been revived as policymakers in Asia’s largest economy moved more aggressively to shore up the economy. Central to that effort have been initiatives to drag the real estate market out of a yearslong slump.
Guangzhou became the first tier-one city to remove all restrictions on homebuyers. Shanghai, China’s financial hub, and Shenzhen, the southern city known for its tech industry, announced they were lowering minimum downpayment ratios for first and second homes to 15 and 20 per cent, respectively. China’s central bank also announced on Sunday that it would allow refinancing of mortgages.
Iron ore futures jumped 8.7 per cent to $US111 a tonne as of 8am in Singapore after jumping as much as 10.6 per cent earlier. That followed a surge of more than 11 per cent last week.
Bloomberg
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