Iron ore price rises as Chinese demand hopes persist

Iron ore prices continued to rally as traders clung to hopes that recent policy moves in China will spur demand.

Overall, sentiment remained bullish despite October data showing new home prices fell at the fastest pace since 2015. Futures for steel and other metallurgical resources in China also rose.

The 62% iron benchmark fine imported to northern China changed hands at $97.53 a ton on Wednesday morning, up 1.7%, according to Fastmarkets MB.

January's best-selling iron ore on China's Dalian Commodity Exchange ended afternoon trading up 2.2% to 734 yuan ($103.74) a tonne. It increased profits during the day trading and reached 741 yuan, the highest level since October 11.

“Short-term trading is dominated by emotions,” analysts at Sinosteel Futures note.

Despite the current Covid-19 infection outbreak, Dalian iron ore is up nearly 20% this month after a debacle in October.

Although economic data in October indicated a slowdown in the world's second-largest economy due to COVID-19-related restrictions and a slowdown in the real estate sector, news of a bailout package for ailing Chinese property developers boosted optimism.

According to some analysts, some market participants may suggest that China may take additional measures to support its economy.