Prices for iron ore cargoes climbed to CNY 840 per tonne in February, the highest level in seven months, as traders bet on a recovery in Chinese ferrous metal demand.
Iron ore holds at seven-month high
The optimism was fueled by fresh economic data indicating that new government bond issuance in China reached CNY 693 billion in January, more than double the amount from the previous year. This suggests that policymakers are beginning to implement stimulus measures aimed at reviving the country’s slowing economy, reinforcing hopes that industrial activity and construction demand will strengthen.
China’s prolonged housing crisis may be stabilizing
The latest developments also boosted confidence that China’s prolonged housing crisis may be stabilizing. Home prices, which had been in decline, hit a six-month low in February, supporting expectations that the worst of the downturn has passed. Further bolstering sentiment, reports emerged that local authorities have started purchasing properties from major distressed developers, signaling a willingness to intervene in the real estate sector—one of the world's largest consumers of steel. Such measures could help ease financial pressures on developers and gradually restore confidence in the property market, which has been a key driver of iron ore demand.
BHP highlighted signs of economic recovery in China
Meanwhile, mining giant BHP highlighted signs of economic recovery in China, coupled with expected interest rate cuts by global central banks, as key factors that could support stronger demand for industrial and precious metals. As a result, investors remain focused on further policy signals and infrastructure spending plans from Chinese officials, which could determine the pace and sustainability of the anticipated rebound in iron ore demand.
