Iron ore rises on upbeat economic data, easing intervention concerns

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Dalian iron ore futures rose on Wednesday, buoyed by positive economic data and persistently strong demand and as concerns over China’s supervision of the markets to ensure price stability began to fade.

The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) closed up 1.9% at 980 yuan ($136.92) per metric ton.

On the Singapore Exchange, the benchmark January iron ore was up 2% at $129.05 a metric ton by 0730 GMT.

State-backed DCE on Nov. 30 said it will enhance supervision of the iron ore market for safe and stable market operation. This came after an announcement on Nov. 24 that China will reinforce oversight and curb a price rally.

However, the influence of market supervision is now waning despite its initial effectiveness at price control, with analysts noting a diminishing impact as market participants increasingly overlook its significance.

Meanwhile, confidence has been creeping back into the market amid efforts to boost China’s troubled property sector.

China’s iron ore imports have also been relatively robust so far in 2023.

Declines in Chinese exports likely slowed in November, a Reuters poll showed on Wednesday, amid mixed signs that factories in the world’s second-largest economy may be finding their footing after a bruising slump in demand.

Rio Tinto on Wednesday brought forward the start of production at its Simandou iron ore project in Guinea to 2025 from 2026, which will add around 5% to global seaborne supply when it comes on line.

Steel benchmarks on the Shanghai Futures Exchange were mixed. The most-active rebar contract SRBcv1 was up 1.1%, hot-rolled coil grew 1.3%, and wire rod SWRcv1 increased by 1.5%. Meanwhile, stainless steel SHSScv1 decreased 0.2%.

Other steelmaking ingredients Dalian coking coal and coke inched up 1.6% and 1.4%, respectively.

The market awaits a batch of Chinese import and export data due this Thursday for directions.
Source: Reuters

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