The iron ore price reached a four-week high on Thursday bolstered by rebounding steel margins in China and hopes of solid economic recovery for the world’s biggest steel producer.
Steel prices also stretched gains, hitting two-week highs in Shanghai following a Financial Times report saying China will help cash-strapped property developers by issuing 1 trillion yuan ($148.3 billion) in loans for stalled projects.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange ended daytime trade 7.2% higher at 793.50 yuan ($117.67) a tonne.
Twelve blast furnaces in China have resumed operations as margins improved, Chinese metals information provider SMM reported, although dozens remained shut for weeks as weak steel demand and low prices had recently squeezed profits.
Iron ore and other steelmaking ingredients have now been supported by what analysts at Zhongzhou Futures said is a “sharp recovery” of margins, and upbeat Chinese economic data, with industrial output and profits recovering in June.
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