Iron ore futures erased earlier losses and are set for a fifth weekly gain on Friday as optimism from real estate support in top consumer China outweighed headwinds from the latest government intervention.
January's top-traded iron ore on China's Dalian Commodity Exchange (DCE) ended the day's trading 0.61% higher at 986.5 yuan ($136.80) per metric ton.
December iron ore prices rose on the Singapore Exchange up 0.88% to US$134.35 a tonne, after falling 1.15% in the previous session.
The sustained rise in prices of key raw materials for steel production comes as Beijing moves to revive its debt-ridden sector real estate, the country's largest consumer of steel.
China may allow banks to offer unsecured short-term loans to qualified developers for the first time, Bloomberg News reported on Thursday.
This comes after Chinese regulators , are said to be drawing up a list of 50 developers eligible for the financing.
China's government planner said it will closely monitor developments in the iron ore market and will further tighten oversight of spot and futures trading in its latest in an attempt to contain price increases that sent prices tumbling on Thursday.
“Iron ore prices are likely to consolidate in the near term amid a combination of favorable and unfavorable factors,” analysts at Everbright Futures said in a note. p>
Steel quotations on the Shanghai Futures Exchange increased due to rising prices for raw materials. SRBcv1 reinforcement rose in price by 0.66%, hot-rolled coil rose in price by 0.85%, wire rod rose in price by 1.3%, stainless steel rose in price by 0.92%.
