SINGAPORE: Iron ore prices traded in a tight range on Monday as investors weighed weakening demand in China seasonally, the world’s top consumer, against bets on Beijing’s fresh stimulus to bolster the world’s second-largest economy.
The most-traded iron ore contract on China’s Dalian Commodity Exchange (DCE) ticked down 0.07 percent to 670.5 yuan (USD100.52) a metric ton, as of 0201 GMT. The benchmark November iron ore on the Singapore Exchange was up 0.07 percent at USD90.6 a ton, as of 0151 GMT. Consumption of the key steelmaking ingredient softened amid persistently weak steelmaker profitability, hampered by sluggish downstream demand and resilient feedstock prices.
The average daily hot metal output, a gauge of iron ore demand, fell 0.5 percent from the previous week to 2.32 million tons as of October 22, the lowest level since late March, data from consultancy Mysteel showed. That said, hopes of new stimulus from Beijing to shore up the economy curbed ore price losses.
While China’s third-quarter economic growth beat expectations and kept Beijing on track to meet its annual target of 4.5 percent-5.0percent, additional stimulus will be needed to boost growth in the first quarter next year.
Coking coal and coke, other steelmaking inputs, fell 0.6 percent and 0.42 percent, respectively, as expectations of a faster supply recovery weighed on prices. Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar nudged down 0.03 percent, hot-rolled coil dipped 0.34 percent, and stainless steel fell 0.62 percent.