Iron ore futures prices rebounded on Tuesday, reversing early losses as positive economic data and strengthening ties between major producer Australia and top consumer China outweighed persistent weakness in China’s property sector.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.13% higher at 767 yuan ($106.91) a metric ton.

The benchmark August iron ore on the Singapore Exchange was down 0.84% at $98.75 a ton, as of 0726 GMT.

China’s Q2 GDP grew 5.2% year-on-year, while June industrial output climbed 6.8% compared to the previous year, beating analyst expectations in the face of U.S. tariffs.

In a meeting on Tuesday, Chinese President Xi Jinping and Australian Prime Minister Anthony Albanese pledged to deepen co-operation and expand free trade between their countries.

Albanese has travelled with executives from mining giants Rio Tinto, BHP and Fortescue, who met Chinese steel industry officials on Monday.

“Strong steel production, healthy mill margins, and low steel inventories appear to have motivated mills to restock raw materials,” analysts from ANZ said in a note.
However, gains were limited by concerns that authorities will continue to curb steel capacity, ANZ added.

Despite the positive growth data, concerns about underlying demand continued to weigh on market sentiment.

China’s new home prices saw their sharpest monthly decline in eight months in June, reflecting continued sluggishness in the property sector.
China’s crude steel output in June fell 3.9% from the previous month, and was down 9.2% year-on-year as more steelmakers carried out equipment maintenance.

In addition, high temperatures in the north and heavy rainfall in the east and south limited outdoor construction, lowering demand for steel products.

Other steelmaking ingredients on the DCE fell, with coking coal and coke down 0.38% and 0.85%, respectively.

Steel benchmarks on the Shanghai Futures Exchange mostly dropped. Rebar RBF1! dipped 0.54%, hot-rolled coil lost 0.31%, wire rod (SWRcv1) fell 2.13% and stainless steel gained 0.08%.
Source: Reuters