BEIJING: Iron ore futures lost ground on Friday, fully erasing gains recorded in the morning session, as softening demand and the expectation of a lack of forceful stimulus in 2024 in top consumer China weighed on sentiment.
The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 1.37% lower at 935 yuan ($131.51) a metric ton, the lowest since Dec. 7. The benchmark January iron ore on the Singapore Exchange was little moved at $134 a ton, as of 0706 GMT.
Chinese leaders agreed at an annual meeting on the economy this week to run a budget deficit of 3% of gross domestic product in 2024, lower than this year’s revised 3.8% target, Reuters reported. This suggested that Beijing is not considering a big fiscal bazooka next year. The continuously falling ore demand, however, is also weighing on the price of the key steelmaking ingredient.
The average daily hot metal output among steel mills surveyed declined for the seventh consecutive week by 1.1% on the week to 2.27 million tons as of Dec. 15, data from consultancy Mysteel showed. “Rising coke prices... put pressure on the industry.
This could lead to steel mills easing back on output, hurting iron ore demand,” ANZ bank said in a note.
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