Iron ore futures rose on Tuesday, as infrastructure demand and steady steel consumption countered weak China economic data.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.5% higher at 800.5 yuan ($113.20) a metric ton.
The benchmark January iron ore (SZZFF5) on the Singapore Exchange gained 0.17% to $103.75 a ton as of 0727 GMT.
Recent infrastructure demand has increased and the demand for steel has been in line with seasonal norms, allowing prices to continue their upward trend in the short term, said Chinese broker Galaxy Futures.
Global iron ore output is expected to accelerate over 2025-2029, with production in Guinea set to be a major driver of growth once the Simandou project goes online, per market intelligence firm CreditSights.
Still, development delays stemming from political and social instabilities, as well as resource nationalism, are expected to impact the sector, CreditSights added.
Shipments from top producer Australia totalled 18.205 million tons, down 191,000 tons month-on-month, according to data from consultancy Mysteel.
Weak economic data from China weighed on iron ore, with an official PMI survey showing China’s manufacturing activity shrank for an eighth month in November.
Policymakers are finding it hard to jump-start activity amid a global slowdown, a protracted property crisis and local governments straining under debt.
Other steelmaking ingredients on the DCE gained ground, with coking coal NYMEX:ACT1! and coke (DCJcv1) rising 1.86% and 2.45%, respectively.
Currently, coking plants are raising output, while the first round of coking coal price reductions has been implemented, slightly improving steel mill profit margins, said Chinese broker Everbright Futures.
Steel benchmarks on the Shanghai Futures Exchange advanced. Rebar RBF1! rose 0.35%, hot-rolled coil EHR1! climbed 0.3%, wire rod (SWRcv1) strengthened 0.44% and stainless steel HRC1! firmed 0.56%.
Source: Reuters