Dalian and Singapore iron ore futures prices hit two-week highs on hopes that China's support for the struggling real estate sector will boost demand.
Iron ore futures for September delivery, the most heavily traded contract on the Dalian commodity exchange, closed at 738 yuan ($109.28) a tonne, up 4.1 percent after hitting its highest level since July 11 at 746 yuan at the start of the session.
Iron ore futures for August delivery, the most heavily traded contract on the Singapore stock exchange, rose 4 percent to $109.60 per tonne, its highest level since July 12.
The market-wide risk appetite has soared after news that China will set up a real estate fund to help real estate development companies deal with the debt crisis and restore confidence in the industry.
Rebar prices on the Shanghai futures exchange fell 0.1 percent after gaining in three sessions. Hot rolled steel (HRC) coil prices are trending sideways. Stainless steel prices, on the other hand, fell 0.1 percent. Dalian coke futures prices rose 0.4 percent and coke futures prices rose 0.1 percent.
Sharp fall warning from Goldman
On the other hand, Goldman Sachs lowered its 3- and 6-month price forecasts, warning that it will cut iron ore prices sharply.
According to Goldman Sachs Group, there will be an excess supply of 67 million tons of iron ore in the second half of the year due to the real estate crisis in China, which will lead to a sharp fall in prices.
The institution lowered its 3-month price target from $90 to $70, and its 6-month target from $110 to $85.
It was also stated that the bank is not expected to pull back as sharply as the period when prices fell to $38 per ton in 2014-2015.
Comments
No comment yet.