BEIJING: Iron ore future prices moved in a tight range on Thursday as market participants await more cues on the trading outlook in the new year after mixed signals in top consumer China clouded direction.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.77% higher at 783 yuan ($107.27) a metric ton, as of 0236 GMT.
The benchmark February iron ore on the Singapore Exchange was 0.35% higher at $100.85 a ton after hitting a low of $99.15 earlier in the session. Chinese markets were closed on Wednesday.
China’s factory activity grew in December but at a slower-than-expected pace, a private sector survey showed on Thursday, echoing an official survey on Tuesday.
That, coupled with concerns over the demand outlook amid looming tariff hikes by incoming US President Donald Trump, spurred hopes of more stimulus measures from Chinese authorities in 2025 to counter any negative impact.
The persistently falling demand in recent weeks because of more equipment maintenance by steelmakers by the year-end, has been a headwind for prices of the key steelmaking ingredient.
“Hot metal output will likely decline further this week…we expect iron ore prices to move within a range of $90 and $100 a ton before the (Chinese New Year) holiday break,” Hongyuan Futures said in a note.
Hot metal output is typically used to gauge iron ore demand.
Iron ore falls on faltering China demand, high portside stocks
Additionally, the replenishment of feedstock by steel mills for their production needs over and after the Chinese New Year holiday has nearly come to an end, indicating potentially lower buying appetite for spot cargoes in the coming weeks, said analysts.
The Chinese New Year starts from Jan. 28 and domestic steelmakers usually build up stocks to meet production needs during and after the holidays.
Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.99% and 0.52%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange advanced.
Rebar added 0.42%, hot-rolled coil edged up 0.23%, wire rod rose 0.42% while stainless steel slid 0.97%.
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