Iron ore futures traded in a tight price range on Tuesday, as investors weighed prospects of fresh stimulus from Beijing next month against signs of softening demand in top consumer China.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.2% higher at 763 yuan ($107.12) a metric ton.
The benchmark December iron ore (SZZFZ5) on the Singapore Exchange fell 0.56% to $101.6 a ton by 0813 GMT.
The recent price drop has triggered some divergence in market outlook, leading to a consolidation, said Steven Yu, a senior analyst at consultancy Mysteel.
“Bulls believe an annual fall in the year-to-date crude steel output has left less pressure on production cuts in the rest of the year; also, there are hopes of stimulus measures to be unveiled in the politburo meeting in December,” Yu said.
China’s crude steel output fell 2.9% year-on-year in the nine months through September, official data showed last month. October figures are due on Friday.
In March, Beijing pledged to restructure its vast steel industry through output cuts.
China has capped the annual crude steel output growth since 2021 as part of its carbon-reduction goals.
Bears, however, are betting on lower demand as some mills continue to trim production, Mysteel’s Yu said.
Several steelmakers have scaled back output amid dwindling steel demand and persistently high raw materials costs that have squeezed margins.
Coking coal and coke, other steelmaking ingredients, slid 3.81% and 3.6%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange posted losses. Rebar shed 0.33%, wire rod eased 0.21%, stainless steel dipped 0.84%, while hot-rolled coil edged up 0.03%.
Source: Reuters