Prices of iron ore futures rebounded on Monday, as a revival of hopes for monetary easing in top consumer China outweighed faltering near-term demand and bleak property data that had sent prices to the lowest levels in one week earlier.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.5% higher at 802.5 yuan ($110.23) a metric ton.
It slid to the lowest level since Dec. 6 at 788 yuan a ton earlier in the session.
The benchmark January iron ore on the Singapore Exchange was 0.92% higher at $104.85 a ton, as of 0712 GMT, after slipping to the lowest since Dec. 9 at $103.2 a ton earlier.
A raft of industrial data that remained relatively weak kept alive calls for Beijing to ramp up consumer-focused stimulus as policymakers brace for more US trade tariffs under a second Trump administration.
China has room to further cut the reserve requirement ratio (RRR) – the amount of cash that banks must hold as reserves, a central bank official said on Saturday, according to state broadcaster CCTV.
“In the short term, eyes are on the timing of a possible interest rate cut and RRR cut,” said Cheng Peng, an analyst at Sinosteel Futures.
Price gains, however, were capped by weak fundamentals of the key steelmaking ingredient.
China’s crude steel output last month fell 4.3% from October, dampened by tighter margins and seasonally weakening downstream steel consumption, while analysts expect December volume to fall further.
Property investment in China fell 10.4% in the first 11 months of 2024 from a year earlier, after dropping 10.3% in January-October, National Bureau of Statistics (NBS) data showed on Monday.
Other steelmaking ingredients on the DCE retreated, with coking coal and coke down 2.74% and 2.24%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar dipped 0.44%, hot-rolled coil dropped 0.34%, stainless steel fell 0.76% while wire rod added 0.42%.
($1 = 7.2804 Chinese yuan)
(By Amy Lv and Colleen Howe; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)
