China’s most important economic meeting concluded this week with...

China’s most important economic meeting concluded this week with an emphasis on increasing urbanisation, which could be bullish for iron ore.

The so-called “Third Plenum” sets the agenda for the next decade with investors hopeful that potential changes to rural land ownership rules and the household registration system will buoy growth in the world’s second-largest economy over the long term.

A move to allow farmers to sell their land for the first time since the Communist Party came to power in 1949, and give migrant workers and their families access to education and social welfare outside their own provinces, would boost urbanisation and consumption.

“Increasing urbanisation would increase demand for raw materials like iron ore and copper,” IG Markets market strategist Evan Lucas told The Australian Financial Review.

“It is a very strong sign for iron ore that they want urbanisation to continue to grow, which should support infrastructure investment as well as increase demand for other products that require steel.”

Iron ore is a key ­steel-making ingredient.

Australia’s biggest export commodity has traditionally experienced a period of weakness in the third and fourth quarters, as the Chinese winter approaches, affecting demand from steel mills and construction activity in that country.

Last year the price dropped from $US117 a tonne in August to $US87 in September and in 2011 it plunged from $US180 a tonne in September to $US117 in October.

But this year the impact was modest, as the price has remained steady above $US130 a tonne.

RBC Capital markets said reduced steel production and low inventories caused a slight rebound in steel prices over the past week.

This should be positive for iron ore and the investment bank expects the price to be well supported through the fourth quarter.

According to independent commodity news service, Platts, some Chinese steel mills looked to restock iron ore reserves over the past week, ahead of winter, while others steered clear of the spot market to wait for more direction on price.

One potential negative for the bulk commodity is the wave of new supply coming online. HSBC has forecast the price to average $US115 a tonne in 2014.

The world’s major suppliers, inclu­ding BHP Billiton, Rio Tinto and Fort­escue Metals Group, have been ramping up production.

Rio’s iron ore division reported record production in the September quarter following its $US9.8 billion investment to lift the capacity of its ­Pilbara operations in Western Australia to 290 million tonnes a year.