Iron ore futures edged up on Tuesday amid reports of new housing incentives, despite weakening steel demand.
Beijing is considering reducing taxes on home purchases, with Bloomberg reporting that the deed tax in major cities like Shanghai and Beijing may drop from 3pct to as low as 1pct. This policy aims to support the struggling property sector, a key consumer of steel. Additionally, the government may reclassify housing categories to eliminate distinctions between ordinary and luxury properties, potentially easing transactions. Experts believe these steps could boost investor interest, stimulate consumer spending, and improve economic stability, while possibly revitalizing bank lending, which has slowed as property values declined and homeowners faced repayment challenges.
However, demand for steel-related raw materials remains weak due to high iron ore inventory at ports, which is pressuring physical market prices, along with a traditionally slower winter season for steel demand.
Reflecting the cautious outlook, leading Chinese steelmakers have opted to maintain their prices. Baosteel left HRC prices unchanged for the domestic market for December sales, while Shagang held its long steel prices flat for the November 11-20 period.
On the Dalian Commodity Exchange, the most-traded iron ore contract rose 0.26pct to 766 yuan (USD 106.3) per ton. Meanwhile, coke and coking coal futures fell by 1.13pct and 1.65pct, settling at 1,929.5 yuan (USD 268) and 1,280 yuan (USD 178) per ton, respectively.
On the Shanghai Futures Exchange, rebar and HRC futures were nearly unchanged, closing at 3,344 yuan (USD 464) and 3,515 yuan (USD 488) per ton, respectively. Wire rod futures gained 0.48pct to 3,573 yuan (USD 496), while stainless steel futures declined 0.92pct to 13,445 yuan (USD 1,867) per ton.
1 USD / 7.2 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,573 |
0.48 |
0.56 |
| HRC | 3,515 |
0.03 |
0.14 |
| Rebar | 3,344 |
0.06 |
0.39 |
| Stainless Steel | 13,445 |
-0.92 |
-0.89 |
| Iron Ore | 766 |
-0.26 |
0.52 |
| Coke | 1,929.5 |
-1.13 |
-0.26 |
| Coking Coal | 1,280 |
-1.65 |
-1.60 |
