BEIJING: Iron ore futures edged higher on Tuesday, as hopes resurfaced for more stimulus from policymakers in top consumer China to spur its economic recovery.
The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) climbed 0.68% to 961.5 yuan a metric ton, as of 0215 GMT.
The benchmark January iron ore on the Singapore Exchange was little moved at $135.1 a ton, as of 0225 GMT.
China’s leaders started a closed-door meeting on Monday to discuss economic targets and map out stimulus plans for 2024, Reuters reported, citing four sources familiar with the matter.
This came after China’s consumer price index (CPI) in November dropped 0.5%, both from a year earlier and compared with October, official data showed.
Iron ore futures rise on strong Chinese export data
This is a deeper fall compared to a Reuters poll of 0.1% declines both year-on-year and month-on-month.
Supporting the prices of the key steelmaking ingredient is also the expectation of a wave of winter stocking among mills with low raw material inventories.
“Ore consumption will maintain at a relatively high level, in part due to the lingering expectation of winter stocking for raw materials,” analysts at Huatai Futures said in a note.
Other steelmaking ingredients also strengthened on improved sentiment, with coking coal and coke on the DCE up 0.99% and 1.13%, respectively.
Lifting sentiment in the coal market is news that some steel mills in north China raised their coke purchase price by between 100 yuan and 110 yuan per ton from Monday, consultancy Mysteel said in a report.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar added 0.2%, hot-rolled coil was little changed, wire rod fell 0.79% while stainless steel advanced 0.22%.
“Some mills started maintenance on their blast furnaces due to thin margins, causing a contraction in supply,” analysts at Yongan Futures said in a note.
“Since the falling pace of steel output has exceeded that in demand, a further destocking is seen. But higher steel prices will constrain demand.”