SINGAPORE: Iron ore futures prices rose on Tuesday, as infrastructure demand and steady steel consumption offset weak China economic data. The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.88 percent higher at 803.5 yuan (USD113.55) a metric ton, as of 0250 GMT.
The benchmark January iron ore on the Singapore Exchange was 0.37 percent higher at USD103.95 a ton. Recent infrastructure demand has increased and demand for steel has been in line with seasonal norms, allowing steel prices to continue their upward trend in the short term, said Chinese broker Galaxy Futures.
Global iron ore output is expected to accelerate over 2025-2029, with production in Guinea set to be a major driver of growth once the Simandou project comes online, according to market intelligence firm CreditSights.
Still, development delays stemming from political and social instability, as well as resource nationalism, are expected to impact the sector, CreditSights added.
Shipments from top producer Australia totalled 18.205 million tons, down 191,000 tons month-on-month, according to data from consultancy Mysteel.
Weak economic data from China weighed on iron ore, with an official PMI survey on Sunday showed that China’s manufacturing activity shrank for an eighth month in November. Policymakers are finding it hard to jump-start activity amid a global slowdown, a protracted property crisis, and local governments straining under debt. Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.81percent and 1.82 percent, respectively.
Currently, coking plants are increasing production, resulting in a steady increase in coking coal output, while the first round of coking coal price reductions has been implemented, slightly improving steel mill profit margins, said Chinese broker Everbright Futures. Steel benchmarks on the Shanghai Futures Exchange all increased. Rebar rose 0.64 percent, hot-rolled coil climbed 0.45 percent, wire rod strengthened 0.44 percent and stainless steel firmed 0.4 percent.
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