BEIJING: Iron ore futures retreated on Monday as caution mounted after the world’s top consumer China issued warnings on enhancing supervision on the market, and as investors awaited details from the government on property-related stimulus.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) dipped 0.15% to 975.5 yuan ($135.28) a metric ton, as of 0212 GMT.
The benchmark December iron ore on the Singapore Exchange fell 1.17% to $132.3 a ton. Market sentiment was weighed as China’s state planner said on Friday it would strengthen the supervision of iron ore at ports and guard against hoarding and speculation in order to maintain an orderly market, its second move within a week to curb a price rally.
A slew of stimulus related to the property market has been unveiled in the past weeks as part of efforts to revive the struggling sector, boosting sentiment and contributing to continuous price gains. Weakening steel market amid seasonally falling demand is also capping price rise in iron ore.
“The retreat in iron ore prices is partly because steel prices have failed to register more gains after having met resistance from downstream consumers,” said Cheng Peng, a Beijing-based analyst at Sinosteel Futures.
“Prices will likely move within a tight range in the short run until there is another clear signal either from a start of the winter restocking or from fresh macro economic stimulus.”