Copper and iron ore extended gains on a report that China may ease curbs on borrowings by developers, adding to a raft of measures to bolster real estate which is brightening the outlook for metals.
Beijing may allow some property firms to add leverage by easing borrowing caps, and pushing back the grace period for meeting debt targets, said people familiar with the matter. The moves would relax the stringent “three red lines” policy that had contributed to worsening the country’s real-estate meltdown and hit demand for steel and copper used in construction.
Copper rose as much as 1.5% and was 0.8% higher at $8,437 a ton on the London Metal Exchange as of 11:02 a.m. local time. Iron ore futures in Singapore rose 2.1% to $118.60, reversing a earlier decline.
China’s flurry of stimulus is aiding sentiment, and boosting confidence that the economy is stabilizing, Everbright Futures said in a note. But the optimism is being tempered by a severe wave of Covid-19 across China, which is crimping activity and worsening the seasonal weakness in manufacturing.
China’s three-year quarantine has helped to contain speculative interest in the commodity markets. Now that China is finally stepping in with aggressive measures to support growth and the property market, industrial resources are playing catch up with energy.Click HERE to subscribe to Fuller Treacy Money Back to top