Dalian iron ore futures
prices extended gains into a second consecutive session on Wednesday, helped by
renewed hopes of demand recovery in top buyer China, following an improving steel
market, although persistent worries about its embattled property market capped
gains.
The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) ended daytime trade 1.08% higher at
889 yuan ($123.49) a metric ton.
"Expectations of stronger construction activity grew. Domestic
construction sites have reopened following the Lunar New Year holiday and are
looking to take advantage of the better margins following iron ore's recent
decline," analysts at ANZ bank said in a note.
Lifting market sentiment is also the improved steel market, analysts said.
Transaction volumes of construction steel products among Chinese traders
surveyed grew by 98.3% day-on-day to 106,700 tons on Tuesday, data from
consultancy Mysteel showed.
"Whether steelmakers will show more interest in restocking ore in coming
days will depend on to what extent steel demand will recover," analysts at
Huatai Futures said in a note.
The benchmark March iron ore on the Singapore
Exchange was, however, 1.29% lower at $116 a ton, as of 0705
GMT, dragged down by persistent concerns over the beleaguered property market,
the largest steel consumer in the world's second-largest economy.
Country Garden Holdings said on Wednesday a liquidation petition has been filed
against the embattled developer for non-payment of a loan worth $205 million,
adding to the woes for China's liquidity crisis-hit property sector.