Dalian iron ore futures lost ground on Wednesday, retreating from a two-month high in the previous session as prospects of weaker seasonal steel demand outweighed bets on further stimulus from top consumer China.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.64% lower at 809.5 yuan ($111.38) a metric ton.
The contract had earlier hit Tuesday’s peak of 818.0 yuan, its strongest level since Oct. 8.
The benchmark January iron ore on the Singapore Exchange was down 1.12% at $104.2 a ton by 0715 GMT.
China’s iron ore imports dropped 1.91% month-on-month in November as shipments slowed ahead of the winter season when colder weather disrupts construction work in the country’s north, dragging on steel demand.
The country’s overall imports unexpectedly shrank in the same month, while exports also slowed sharply, customs data showed on Tuesday.
Steel mills’ profits have fallen, while hot metal output has declined but remains resilient, analysts at Everbright Futures saidin a note.
Meanwhile, in one of their most dovish statements in over a decade, Chinese leaders signalled on Monday they are ready to deploy whatever stimulus is needed to counter the impact of expected U.S. trade tariffs on next year’s economic growth.
Top Communist Party officials said they would switch to an “appropriately loose” monetary policy stance, and “more proactive” fiscal levers.
Analysts say the market is awaiting this week’s Central Economic Work Conference, where Beijing will set policy priorities, including its growth target for next year.
Other steelmaking ingredients on the DCE were mixed, with coking coal DJMcv1 down 0.34% and coke DCJcv1 up 1.07%.
Most steel benchmarks on the Shanghai Futures Exchange ticked down. Rebar dipped 0.15%, hot-rolled coil SHHCcv1 shed 0.17%, stainless steel lost nearly 0.2%, although wire rod strengthened about 0.7%.
Source: Reuters