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METALS: Iron Ore & Copper Tracking Higher With China Property Optimism

METALS
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Iron ore is tracking back towards $109/ton in terms of the active SGX contract. This leaves us short on intra-session highs from end Sep, ($113.55/ton), but sentiment is being aided by optimism around the China property market outlook. The 20-day EMA for iron ore is back sub $100/ton. Copper is back above $462 on a CMX basis, also short of late September highs, but likewise appears to have a positive technical backdrop. 

  • The return of Hong Kong markets, after yesterday's back, has seen the equity rally continue, with China property names the standout. A Bloomberg gauge of China property stocks is up over 100% from its recent lows.
  • Beijing became the latest large city to ease property restrictions (from late yesterday). Commentary from CGS-CIMB per BBG noted: "New home sales in 30 key cities in China last week surged by 61%-106% w/w, an encouraging sign following policymakers’ proactive support for the sector"
  • With China onshore markets still closed until next Tuesday, there may be lighter interest in iron ore. There is no steel futures trading in China either.
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Iron ore is tracking back towards $109/ton in terms of the active SGX contract. This leaves us short on intra-session highs from end Sep, ($113.55/ton), but sentiment is being aided by optimism around the China property market outlook. The 20-day EMA for iron ore is back sub $100/ton. Copper is back above $462 on a CMX basis, also short of late September highs, but likewise appears to have a positive technical backdrop. 

  • The return of Hong Kong markets, after yesterday's back, has seen the equity rally continue, with China property names the standout. A Bloomberg gauge of China property stocks is up over 100% from its recent lows.
  • Beijing became the latest large city to ease property restrictions (from late yesterday). Commentary from CGS-CIMB per BBG noted: "New home sales in 30 key cities in China last week surged by 61%-106% w/w, an encouraging sign following policymakers’ proactive support for the sector"
  • With China onshore markets still closed until next Tuesday, there may be lighter interest in iron ore. There is no steel futures trading in China either.