Iron ore futures advanced on Tuesday, as market participants weighed property sector-related stimulus in top consumer China and a fall in shipments against weaker demand for steel.
The most-traded January iron ore on China’s Dalian Commodity Exchange DCIOcv1 was up 0.3% at 965.5 yuan ($132.39) per metric ton at closing.
“Iron ore futures are clinging to recent highs, supported by expectations of an intangible stimulus-driven recovery in construction and manufacturing activity and a much more tangible decline in Australian & Brazilian shipments over the past week,” said Atilla Widnell, managing director at Navigate Commodities.
On the Singapore Exchange, the benchmark December iron ore SZZFZ3 was down 0.8% at $127.1 a ton.
China will firmly implement policy pledges of the property market to meet the housing demands of the people and promote high-quality development of the sector, said Ni Hong, minister of Housing and Urban-Rural Development.
New bank lending in China fell less than expected in October from the previous month, even after policymakers ramped up measures including cutting banks’ reserve requirement ratios to get the shaky economy back on more solid footing.
“Steel demand in northern regions seasonally weakened amid sharp temperature drops across many regions in China as it entered into winter,” analysts at Galaxy Futures said in a note.
Analysts cautioned about a potential slowdown in steel demand following China’s announcement to restrict trading volumes of iron ore futures contracts.
Steel benchmarks on the Shanghai Futures Exchange were mostly down. The most-active rebar contract SRBcv1 slid 0.6%, hot-rolled coil SHHCcv1 dropped 0.5%, wire rod SWRcv1 decreased 0.4%, and stainless steel SHSScv1 lost 1.3%.
Other steelmaking ingredients Dalian coking coal DJMcv1 and coke DCJcv1 inched down 1.3% and 0.4%, respectively.
Traders, meanwhile, awaited a batch of economic data as well as output for some key commodities on Wednesday for further direction.
Source: Hellenic Shipping News
