BEIJING: Dalian iron ore futures narrowed gains on Wednesday, as some investors retreated to the sidelines on weak industrial data in top consumer China, and as strong expectations of fresh stimulus measures faded.
The most-traded September iron ore on the Dalian Commodity Exchange (DCE) traded 1.05% higher at 819 yuan ($113.32) a metric ton, as of 0230 GMT.
The benchmark July iron ore on the Singapore Exchange was 0.2% lower at $112.35 a metric ton.
Profits at China’s industrial firms tumbled 18.8% year-on-year in the first five months of 2023, extending a 20.6% contraction in the January-April period, data from the National Bureau of Statistics (NBS) showed on Wednesday.
The futures rallied over 4% on Tuesday, as market sentiment was boosted after Chinese Premier Li Qiang said the country would roll out more effective policy measures to expand domestic demand.
Helping eye-catching gains was market chatter that the world’s second-largest economy will announce some stimulus policies later in the day as part of efforts to prop up its bumpy property market.
Nothing came out throughout the day, however, raising doubts on whether the long-waited supportive policies will come.
“The rising momentum was typically strong on prospects of further macroeconomic stimulus measures, but it lost steam when facing weak reality,” said Cheng Peng, a Beijing-based analyst at Sinosteel Futures.
Other steelmaking ingredients, coking coal and coke slip by 0.57% and 0.1% respectively.
Rebar on the Shanghai Futures Exchange was little changed, hot-rolled coil gained 0.21%, wire rod ticked up 0.1% and stainless steel climbed
0.14%.
“Spot transactions of steel products weakened this morning, compared to the previous day and steel inventories has begun to pile up, weighing on sentiment,” said Yu Chen, a Shanghai-based senior analyst at consultancy Mysteel.
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