Iron ore rebounds as weak China data revives stimulus hopes

BEIJING: Iron ore futures gained on Wednesday after several sessions of losses, after soft factory data from top consumer China bolstered hopes of fresh stimulus to spur economic growth in 2026.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) climbed 1.66% to 767.5 yuan ($108.68) a metric ton as of 0246 GMT after falling 0.7% on Tuesday.

The benchmark January iron ore on the Singapore Exchange rose 0.75% to $102.55 a ton as of 0236 GMT.

China’s factory-gate deflation, now in its third year, deepened last month, indicating domestic demand remains weak and unlikely to recover soon.

The producer prices index (PPI) fell 2.2% year-on-year in November, versus a 2.1% fall in October, and worse than the forecast for a 2% drop, official data showed.

While China is on course to achieve its annual economic growth target of around 5%, several analysts expect Beijing to roll out some supportive measures to underpin growth in the first quarter in 2026.

The rebound came even as analysts at state-run China Mineral Resources Group (CMRG) argued the current price trend deviated from fundamentals.

“The speculative activities among traders have amplified price fluctuations,” CMRG analysts were quoted as saying in a statement on the WeChat account of the state-backed steel association on Tuesday. “Prices do not have grounds for trending up in the fourth quarter against backdrop of growing supply and weakening demand.”

CMRG was set up in 2022 to centralise iron ore purchasing and win better terms from miners.

Other steelmaking ingredients, coking coal and dipped 0.69% and added 1.35%, respectively.

Steel benchmarks on the Shanghai Futures Exchange gained ground.

Rebar rose 0.49%, hot-rolled coil climbed 0.31%, wire rod advanced 0.94% and stainless steel gained 0.48%.