LAUNCESTON, Australia, May 28 (Reuters) – The balance of risks for iron ore prices are tilted to the downside despite top buyer China’s most recent steps to boost its struggling property sector.
A series of stimulus measures announced earlier this month will see up to 1 trillion yuan ($138 billion) in new property funding, an easing of mortgage rules and allowing local governments to buy some apartments in order to clear overhangs.
The spot price of iron ore was initially boosted by the policy support for housing, with Singapore-traded futures gaining nearly 2% to reach a two-week high of $119.20 a metric ton in the three trading sessions after the May 17 announcement.
But the contract has since meandered and ended at $118.04 a ton on Monday. The issue for the market is how quickly does the extra support for the property sector translate into higher steel demand, and thus demand for iron ore, the key raw material.
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