Iron ore heads for weekly gain on China's property stimulus efforts

Iron ore futures extended gains on Friday and were on track for a weekly gain, supported by resilient demand and a brighter demand outlook in top consumer China thanks to its latest property stimulus efforts.

The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) TIO1! ended morning trade 1.32% higher at 884 yuan ($122.33) a metric ton. It has logged a gain of 2% week-on-week.

The benchmark June iron ore <SZZFM4> on the Singapore Exchange was 0.6% higher at $117.25 a ton, as of 0427 GMT.

Near-term ore demand remained resilient with the average daily hot metal output among steelmakers surveyed climbing by 1% week-on-week to 2.37 million tons as of May 17, the highest since November 2023, data from consultancy Mysteel showed.

Bolstering sentiment is also news that China's housing and financial regulators will hold a meeting on Friday to discuss policies to ensure housing delivery.

However, a batch of remaining weak data in the property sector, China's largest steel consumer, capped gains.

Property investment in China in the first four months of 2024, fell 9.8% from a year earlier, after dropping 9.5% in the first quarter.

Also, China's new home prices dropped at the fastest monthly pace in over nine years in April.

Other steelmaking ingredients on the DCE advanced further, with coking coal NYMEX:ACT1! and coke (DCJcv1) up 2.23% and 2.5%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were higher. Rebar RBF1! added 1.04%, hot-rolled coil EHR1! rose 0.79%, wire rod (SWRcv1) climbed 1.08% and stainless steel HRC1! gained 1.17%.

China's crude steel output in April fell 2.6% from the previous month and dropped 7.2% from the previous year to 85.94 million tons, statistics bureau data showed, missing expectations.

Total output from January to April declined by 3% to 343.67 million tons.

($1 = 7.2266 Chinese yuan)