* China Jan-Feb property sales climb 25.1 pct, outpacing
* Steel capacity cut expectations also aiding steel prices
By Manolo Serapio Jr
MANILA, March 14 Chinese steel and iron ore
futures climbed about 3 percent on Tuesday, extending steep
gains from the previous session after a spike in property sales
in the first two months of the year suggested steel demand will
Expectations that China will strengthen efforts to curb
excess steel capacity also aided prices.
The most-active rebar on the Shanghai Futures Exchange
was up 3 percent at 3,564 yuan ($515) a tonne by the
midday break, after earlier hitting a two-week high of 3,615
Iron ore on the Dalian Commodity Exchange had
risen 3.6 percent to 682 yuan per tonne. The steelmaking
ingredient initially touched 697.50 yuan, its highest since
China's property sales surged 25.1 percent in January and
February, outpacing the 22.5 percent annual gain in 2016, which
was the strongest annual growth in seven years thanks to a
property boom in top-tier cities.
"Fundamentally, steel prices may be supported again given
the strong property market," said Wang Di from CRU consultancy
in Beijing. "But we still need to see whether it's going to be
Also supporting steel prices is China's sustained campaign
to tackle a glut, with Beijing having pledged to eliminate 50
million tonnes in excess steel capacity this year as well as
shut down production of low-grade steel products by end-June.
Comments from a Chinese government official that the
capacity to be removed from low-grade steel would be on top of
the 50 million tonnes "also injected bullish sentiment into the
market", said Di.
The rally in futures boosted offers of physical iron ore
cargoes in China, traders said.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB
rose 1.8 percent to $88.26 a tonne on Monday, according to Metal
"Enquiries also improved for both seaborne cargoes and port
materials, though caution remained as the market appeared to be
just starting to recover," Metal Bulletin said in a note.
($1 = 6.9171 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)