Iron ore futures rose on Monday, buoyed by expectations of policy support from Beijing, even as fundamentals in the steel sector continued to weaken.
A senior official from China’s central bank announced plans to boost monetary and credit supply, suggesting room for further reductions in the reserve requirement ratio. The People’s Bank of China (PBOC) also aims to ease financing conditions for the real economy, raising hopes for additional economic stimulus measures.
Recent economic data from China has remained weak, further fueling expectations of government intervention to stimulate growth. Consumer spending in November fell short of expectations, while the real estate market continued to falter. Real estate investment for the January-November period declined by 10.4pct YoY.
Despite the optimism for stimulus, the outlook for iron ore remains bearish due to declining steel production and demand, coupled with rising port-side inventories. Data from the China Iron and Steel Association (CISA) revealed a 3.2pct drop in daily crude steel output among its member mills in late November, averaging 2.02 mln tons per day. However, on a YoY basis, daily output was 1.5pct higher for the same period.
On the Dalian Commodity Exchange, iron ore futures climbed 0.5pct to 802.5 yuan (USD 110.2) per ton. In contrast, coke and coking coal futures declined by 2.24pct and 2.74pct, closing at 1,815 yuan (USD 249) and 1,136 yuan (USD 156) per ton, respectively.
In the Shanghai Futures Exchange, rebar futures fell 0.44pct to 3,362 yuan (USD 462) per ton, while HRC futures dipped 0.34pct to 3,493 yuan (USD 480) per ton. Wire rod prices gained 0.42pct to 3,594 yuan (USD 494) per ton, but stainless steel futures dropped 0.76pct to 13,000 yuan (USD 1,786) per ton.
1 USD / 7.27 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,594 |
0.42 |
0.19 |
| HRC | 3,493 |
-0.34 |
0.06 |
| Rebar | 3,362 |
-0.44 |
0.06 |
| Stainless Steel | 13,000 |
-0.76 |
-0.50 |
| Iron Ore | 802.5 |
0.50 |
0.69 |
| Coke | 1,815 |
-2.24 |
-1.10 |
| Coking Coal | 1,136 |
-2.74 |
-2.02 |
