The futures prices of iron ore continued their consecutive increases in the second session on Wednesday, driven by buying wave in China's spot market and expectations that the world's second-largest economy will announce further incentives to revive its struggling property market.
The most actively traded September iron ore contract on the Dalian Commodity Exchange in China extended its gains, rising by 3.4% to reach 826 yuan (113.67 USD) per metric ton during intraday trading, hitting the highest level since June 21st. Beijing, the capital of China, lowered the minimum down payment ratio for first-time homebuyers to not less than 20% on Wednesday. This move spurred investors into action on potential stimulus expectations in the market.
The third plenary session, an important meeting focusing on reforms and modernization, will take place in July. Some investors believe that the potential for further price declines is limited, hence they are closing out their short positions to realize profits.
Daily crude steel output from member steel producers dropped by 2.8% to around 2.19 million tons compared to the previous 10-day period, according to data from the China Iron and Steel Association. Reports suggest production cuts due to losses incurred by some steel producers reliant on electric arc furnaces.
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