The price of %IronOre and several industrial metals rose sharply on news that China’s government is taking steps to boost the country’s ailing economy.
Chinese officials in Beijing announced a series of measures meant to spark economic growth in the country of 1.4 billion people and bolster the struggling property market.
Reports of the stimulus measures sent iron ore prices 5.5% higher to $94.35 U.S. per ton in Asian trading.
It’s a sharp turnaround for iron ore, which has been one of the worst performing commodities this year as a slowdown in China has hurt demand for the steelmaking ingredient.
Prices for industrial metals also advanced on news of China’s stimulus measures, with copper gaining 1.6% on the London Metal Exchange to $9,697 U.S. a ton, its highest price since July.
Zinc and aluminum prices each rose more than 1% in London trading.
China’s central bank said it will help banks boost their lending to consumers, lower short-term interest rates, and cut mortgage rates to help stimulate the country’s property sector.
The growth measures in China come days after the U.S. Federal Reserve began lowering interest rates and signaled that further reductions are likely in coming months.
A debt crisis in China’s property sector has brought construction to a near standstill and hurt demand for iron ore and various industrial metals, with mills reducing their steel output.