MANILA: Dalian and Singapore iron ore futures edged lower on Wednesday in volatile trade, as uncertainty lingered around China’s pivot away from its stringent zero-covid policy and caution emerged over signs that the market is overbought.
The most-traded iron ore for May delivery on China’s Dalian Commodity Exchange ended morning trade down 0.1% at 779 yuan ($111.58) a tonne, after a 0.2% drop in the previous session.
The benchmark Dalian contract has risen about 10% this quarter as recent gains spurred by top steel producer China’s ramped-up policy support for ailing domestic property developers and easing of its Covid restrictions offset losses from the sell-off in October. On the Singapore Exchange, the steelmaking ingredient’s front-month January contract was down 0.2% at $107.95 a tonne, as of 0414 GMT. However, it was about 40% up from its end-October level.
China-bound iron ore’s spot prices have also rebounded strongly, rising to a four-month high of $110 a tonne on Tuesday, based on SteelHome consultancy data.
“The recently-announced support measures for the property market in China suggests the worst is behind us for bulk commodity markets,” ANZ commodity strategists said in a note.
“That said, things are still looking challenging amid lingering uncertainty around Chinese reopening and slowing economic growth in developed markets in the short-term.”
China should optimise epidemic prevention and control measures next year as it seeks to better coordinate Covid-related policies with economic and social development, state media reported on Wednesday, after a high-level meeting of the Communist Party.
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