BEIJING: Iron ore futures retreated on Wednesday as investors became wary of possible downside risks after stimulus announced a day before during an agenda-setting meeting of policymakers in top consumer China undershot expectations.

The benchmark January iron ore on the Singapore Exchange slid 2.06% to $133.3 a metric ton, as of 0706 GMT. The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 1.35% lower at 948 yuan ($131.94) a ton.

“China’s leaders disappointed the market without any calls for large stimulus measures,” analysts at ANZ bank said in a note. The country will step up policy adjustments to support an economic recovery in 2024, state media said, citing the annual Central Economic Work Conference held from Dec. 11-12.

“It’s normal to see a downward price correction, as the last flurry of price rallies was mainly driven by strong expectations of macroeconomic stimulus,” said Chu Xinli, a Shanghai-based analyst at China Futures.

Steelmakers preferred to purchase portside cargoes on a hand-to-mouth basis instead of placing orders for the expensive seaborne cargoes amid thin margins, said Pei Hao, a Shanghai-based analyst at international brokerage FIS. “That’s partly the reason why a steeper fall is seen for the Singapore benchmark.” Other steelmaking ingredients also weakened, with coking coal and coke on the DCE collapsing 4.72% and 2.96%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were broadly down as cost support receded and demand softened after the latest cold wave disrupted construction activity in many regions in north China. Rebar shed 2.38%, hot-rolled coil fell 1.89%, and wire rod lost 1.93%. Chinese authorities warned that most of the country would face heavy snowfall, blizzards, and plunging temperatures this week, in what could be one of the coldest December snaps in China in decades.