China's iron ore futures ended a choppy session higher on Friday on hopes of increased demand as Beijing vowed to keep economic policies stable yet more effective to help achieve next year's growth target. The Dalian Commodity Exchange's most-traded iron ore contract, with a May 2020 expiry, closed up 0.3% at 653.50 yuan ($92.84) a tonne. The benchmark rose 5.6% from last week, its fifth consecutive weekly gain.
On the Singapore Exchange, the front-month January 2020 contract was up 0.5% at $92.93 a tonne, by 0703 GMT. The Central Economic Work Conference, a closed-door gathering of top Chinese leaders and policymakers, was held in Beijing this week, to discuss next year's policy direction, Xinhua news agency reported.
Investors are on the lookout for fresh measures by Beijing to ward off a sharper slowdown in the world's second-largest economy which has been buffeted by the Sino-US trade war.
China's policy direction in 2020 is "quite favourable to commodity demand", with steelmaking raw materials such as iron ore and coking coal among those likely to benefit the most, said Helen Lau, mining and metals analyst at Argonaut Securities.
The "work plan", and the possible de-escalation of trade tensions between Beijing and Washington as old tariffs may be reduced and new ones get delayed, would lend support to Chinese exports next year, Lau said.
"Beijing recognises the downside pressures on growth are increasing and has vowed to make efforts to stabilize growth," analysts at Nomura said in a note. A memo released by Xinhua after the conference did not specifically mention a growth target for 2020, they said.
Keeping iron ore's gains in check, demand for the material in the short term may weaken as fresh steel production curbs loomed in China's biggest steelmaking region of Hebei.
The "orange smog alert" issued by Hebei province, home to the country's top steelmaking cities, takes effect from Friday. The alert requires companies including steel mills to take action to cut emissions, even restrict production in some cases, amid adverse weather conditions that could worsen pollution.
Benchmark spot 62% iron ore for delivery to China was steady at $94.80 a tonne on Thursday, the highest since Sept. 18 this year, data from consultancy SteelHome showed.
The most-traded construction steel rebar contract on the Shanghai Futures Exchange slipped 0.3%, while hot-rolled steel coil, used in cars and home appliances, slumped 0.7%. Dalian coking coal edged up 0.2% but Dalian coke dropped 0.4%.
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