SINGAPORE: Prices of iron ore futures edged higher for the third straight session on Wednesday, as stronger steel production outweighed a raft of weaker economic data in top consumer China.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) was up 0.38% at 786.5 yuan ($108.40) a metric ton, as of 0233 GMT. The benchmark December iron ore on the Singapore Exchange was 0.48% higher at $103.05 a ton.
“Iron ore markets again marked time above $100 with the increase in Chinese steel production supporting prices,” Westpac analysts said in a note.
China’s steel output remains well above average rates for this time of year, with production over the last three weeks up 9.5% versus the average for the same period in the last three years, Westpac said, citing data from the China Iron and Steel Association. China is both the world’s top consumer and producer of the metal.
Still, the country’s industrial profits fell again in October. Demand remains soft in the crisis-hit economy, with consumer prices at a four-month low while industrial output continues to trend downward and October new home prices fell at their fastest pace in nine years.
Meanwhile, Chinese officials warned that US President-elect Donald Trump’s pledge to impose hefty tariffs on goods from China would harm the economies of all involved, cause inflation to spike and damage job markets.
Trump’s plans regarding China remained unclear as he had previously mentioned imposing tariffs of 60% or higher. However, on Monday, he only referred to “an additional 10% tariff, above any additional tariffs, on all of their many products” coming into the US Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 2.04% and 1.22%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were weaker. Rebar dipped 0.27%, hot-rolled coil edged 0.2% lower, wire rod shed about 1.2% and stainless steel dropped 1.14%.
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