Iron ore surges in Asia after China homebuying rules eased

Iron ore futures spiked in early trading Monday after three of China’s biggest cities eased restrictions on homebuying, raising hopes for stronger demand in the top global consumer of the steelmaking ingredient.

Shanghai, Guangzhou and Shenzhen loosened rules, following through on the government’s moves last week to lift the struggling property sector, and China’s central bank announced on Sunday that it would allow refinancing of mortgages.

Benchmark Singapore iron ore (SCO:COM) surged more than 9% to $111.50/ton in early trading after rising nearly 11% earlier, which followed an 11% rally last week.

Iron ore prices are still down ~15% since late May due to China’s slowing economy and abundant production from Brazil and Australia, home to the world’s four largest exporters.

Potentially relevant stocks include BHP (NYSE:BHP), Rio Tinto (RIO), Vale (VALE), Fortescue (OTCQX:FSUMF), Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) and Anglo American (OTCQX:AAUKF) (OTCQX:NGLOY).