Iron ore stocks fall as new China housing support disappoints
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The news: Australia's iron ore majors edged down on the ASX as China's housing minister announced fresh property support measures that failed to bolster iron ore futures.
The numbers: Iron ore heavyweights Fortescue (-1.5%), BHP (-1.1%), Rio Tinto (-0.7%) and Champion Iron (-0.7%) were all trading lower by 2:30pm AEDT. Materials, down 0.31%, was the second worst performing sector as the wider market added 0.63%.
Housing minister Ni Hong said China aims to increase bank credit support for unfinished housing projects to 4 trillion yuan ($839 billion) from around 2.23 trillion yuan by the end of the year.
Ni also said the government will aim to renovate 1 million houses in "urban villages".
Iron ore futures spiked almost 2% in Singapore immediately after Ni's comments, before tumbling more than 2%, according to Bloomberg.
The context: Ni said the extension to its "white list" credit program would see all residential property projects qualify to receive loan support.
For unfinished housing projects that have entered the "white list" credit support program, banks are asked to lend to them as much as possible and expedite the loan issuance process, Ni said. As part of the scheme, local authorities should also coordinate various stakeholders to help address those projects' problems.
Meanwhile, Ni said local governments will be allowed to issue special bonds to pay for the renovation of homes in so-called "urban villages". He noted the program may be increased beyond the one million unit goal if needed.
The source: Bloomberg
