* Shanghai rebar, Dalian iron ore rebound from multi-week
* Chinese cities announce new restrictions on property
* China economy may support markets against further declines
(Recasts as prices rebound)
By Manolo Serapio Jr
MANILA, Oct 10 Iron ore and steel futures in
China bounced back from multi-week lows on Monday amid hopes
that government efforts to curb property purchases may only have
limited impact in cooling overall steel demand amid a mending
A number of Chinese cities including Beijing, Guangzhou,
Shenzhen, Suzhou, Chengdu and Wuhan - in a bid to combat rising
property prices - announced new restrictions on purchases and
mortgage down payments during China's National Day holiday in
the beginning of October.
China's central bank Governor Zhou Xiaochuan said the
government is "paying close attention" to rising property values
in some cities and will take appropriate measures to promote the
real estate market's "healthy development".
The measures on the property market "may in a sense affect
sentiment but we don't really see a big crash in new (housing)
starts because China's underlying economic condition is
improving," said Helen Lau, an analyst with Argonaut Securities
in Hong Kong.
The most-traded rebar, a construction steel product, on the
Shanghai Futures Exchange closed up 0.3 percent at
2,270 yuan ($340) a tonne after falling as far as 2,209 yuan,
the lowest since Sept. 19.
On the Dalian Commodity Exchange, iron ore jumped
1.2 percent to end at 412.50 yuan per tonne. The steelmaking raw
material touched 398 yuan earlier, a level last seen on Sept.
Activity in China's manufacturing sector expanded again in
September, an official survey showed on Oct. 1, which may
indicate that recent positive momentum can be sustained.
"So long as these restrictions are applied to only tier-1
and tier-2 cities we may still see construction volumes lift in
tier-3 cities and below," Commonwealth Bank of Australia analyst
Vivek Dhar said in a note.
The lower tier cities accounted for 80-90 percent of new
construction volumes during China's commodity boom and could
still push China's commodity demand higher, said Dhar.
Activity in the physical iron ore markets may pick up this
week after slow trading during China's Oct. 3-7 holiday.
Iron ore for delivery to China's Tianjin port .IO62-CNI=SI
stood at $54.40 a tonne on Friday, the lowest since July 1 and
down 1.5 percent for the past week, according to The Steel
($1 = 6.6685 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Tom Hogue and