(Bloomberg) — Iron ore tumbled to a three-week low, a sign that investors doubt whether China’s latest moves to shore up the property market will do enough to boost construction activity and steel demand.
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China will expand a program to support the completion of unfinished housing projects to 4 trillion yuan ($562 billion), Housing Minister Ni Hong said at a briefing on Thursday. That’s nearly doubles the scale of spending as Beijing bids to ease the real-estate crisis.
Iron ore futures fell as much as 2.8% to $101.85 a ton in Singapore, touching their lowest since Sept. 27, while steel rebar in Shanghai sank as much as 2.7%
“The property policy are focusing on resolving the backlog of housing inventory, which doesn’t really help much with steel demand in the short term,” Zhou Mingbo, an analyst with GF Futures Co., said by phone.
Iron ore rallied from a two-year low below $90 in late-September to above $110. But prices have faded as a series of government briefings on economic policy fell short of expectations. China’s economy is still under pressure, with its third quarter growth likely to be at its weakest pace in six quarters, according to a Bloomberg survey.
Investors are placing too much expectation on government announcements of stimulus, Han Jing, analyst with SDIC Esssence Futures Co., said by phone. There has been a clear shift in government policies, but the scale and the pace will become clear more gradually, he said.
Futures in Singapore traded at $102.65 at 11:32 a.m. local time. Copper on the London Metal Exchange was little changed, while aluminum and zinc fell.
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