SINGAPORE: Dalian iron ore futures rose on Wednesday, buoyed by persistently strong demand, and as concerns over China’s supervision of the markets to ensure price stability began to fade.
The most-traded January iron ore on China’s Dalian Commodity Exchange rose 1.3% to 974 yuan ($136.14) per metric ton as of 0300 GMT. On the Singapore Exchange, the benchmark January iron ore was up 1.3% at $129.05 a metric ton.
State-backed Dalian Exchange announced on Nov. 30 its commitment to enhance supervision of the iron ore market for safe and stable market operation. This came after the announcement on Nov. 24 that China will reinforce oversight and curb a price rally.
Initially effective at price control, market supervision is now waning in influence, with analysts noting diminishing impact as market participants increasingly overlook its significance. Confidence has been creeping back into the market amid efforts to boost the property sector in China.
There have been some signs of improvement, with China’s new home prices rising slightly in November for a third monthly gain. China’s iron ore imports have also been relatively robust so far in 2023. Rio Tinto, on Wednesday brought forward the start of production from its giant Simandou iron ore project in Guinea to 2025, which will add around 5% to global seaborne supply when it comes on line a year earlier than expected.
Steel benchmarks on the Shanghai Futures Exchange were mixed. The most-active rebar contract and hot-rolled coil were both up 0.4%. Meanwhile, wire rod and stainless steel decreased 1% and 0.6%, respectively.
Other steelmaking ingredients Dalian coking coal and coke inched up 1.2% and 1%, respectively. The market awaits a batch of Chinese import and export data due this Thursday for directions.
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