SINGAPORE: Iron ore futures prices traded within a narrow range on Thursday after investors balanced stronger prospects for China’s steel market with weaker economic data from the world’s top consumer, limiting significant price movement in the market.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.32% higher at 789.0 yuan ($108.91) a metric ton, as of 0235 GMT.
The benchmark December iron ore on the Singapore Exchange was flat at $103.8 a ton. “The steel sector has shown signs of improvement in recent months,” ANZ analysts said in a note.
“Strong exports and falling inventories have helped, while gains in steel output have continued through November.” Cumulative losses in China’s steel industry shrank to 23 billion yuan in January-October from 34 billion yuan over the first nine months of the year, ANZ said, citing National Bureau of Statistics data.
“Improved steel mill profits added to the improved tone, with the market focused on the Chinese Politburo meeting due early in December and the Central Economic Work Conference mid-December,” Westpac analysts said.
China is both the world’s top consumer and producer of the metal. Still, the country’s industrial profits extended declines in October to fall 10% year-on-year, weighed down by deflation pressures and soft demand in its weakening economy. Fresh headwinds from higher US tariffs could also threaten China’s industrial sector next year, reducing export earnings. Chinese state media on Tuesday warned US President-elect Donald Trump his pledge to impose additional tariffs on China’s imports could drag the world’s top two economies into a mutually destructive tariff war.
Other steelmaking ingredients on the DCE edged lower, with coking coal and coke down 0.16% and 0.68%, respectively. Steel benchmarks on the Shanghai Futures Exchange posted marginal gains. Rebar was flat, hot-rolled coil added about 0.1%, wire rod advanced 0.77% and stainless steel edged 0.14% higher.
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