SINGAPORE: Dalian iron ore futures prices retreated on Wednesday but hovered near two-month highs, as investors weighed optimism over Beijing’s policy shift against softer trade data from the top consumer. The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.46% lower at 811.0 yuan ($111.94) a metric ton, as of 0305 GMT.
Earlier in the session, the contract hit Tuesday’s peak of 818.0 yuan, its strongest level since Oct. 8. The benchmark January iron ore on the Singapore Exchange was down 0.27% at $105.1 a ton. “Iron ore extended its gains towards $106 per ton as the market remained optimistic about recent support to revive property markets and growth,” said ANZ analysts in a note.
In one of their most dovish statements in over a decade, Chinese leaders signalled on Monday they are ready to deploy whatever stimulus is needed to counter the impact of expected US trade tariffs on next year’s economic growth.
The top Communist Party officials said they would switch to an “appropriately loose” monetary policy stance, and “more proactive” fiscal levers. Further, volumes of iron ore dispatched to global destinations from 19 ports and 16 mining companies in Australia and Brazil dropped to an eight-month low in the week of Dec. 2-8, data from Chinese consultancy Mysteel showed.
Still, China’s November exports slowed sharply and its iron ore imports fell 1.91% from October on expectations of weak seasonal demand.
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