Iron ore futures rebounded from losses, as market were pushing for high levels despite negative steel margins.
The futures of Dalian Commodity Exchange (DCE) for January delivery then rose by 2.49% day-on-day or up RMB 13 to RMB 536/mt, during the day trading session on Friday.
The rebar futures also inched up by 2.15% day-on-day or up RMB 90 to RMB 4,285/mt, during the day trading session.
Property optimism in the face of mounting debts
The futures upticks reflected some market optimism on China’s property market as the cash-strapped real estate developer, Evergrande resumed construction projects in southern China.
According to media outlets, the real estate firm has restarted the construction works on 63 projects in the Pearl River Delta region, spanning around 15 work sites from Guangzhou city to other cities like Foshan, Qingyuan, Yangjiang and Zhaoqing.
However, the company is not out of its debt woes yet, as it avoids bank defaults with just-in-time payments before loan interest deadline and had since sold off other business stakes like HengTen Networks to ease debt burdens.
Higher than average port buildup of iron ore inventory
Iron ore inventories had been building up at Chinese portside, which was considered normal during year-end period.
As the buildup will ensure mills to have adequate raw materials supplies to last through the winter and prepared for the increased construction activities in spring season next year.
However, the port stockpiles were rather high for this time of the year as Mysteel recorded iron ore port inventories at 151.06 million mt as of Nov 19, up 1 million mt on-week and much higher than the pre-winter peaks of the past two years at 130 million mt levels.