Iron ore edges higher as market awaits Beijing policy signals

Iron ore futures traded in a narrow range on Wednesday, edging slightly higher as expectations of potential stimulus from China offered support, though weak market fundamentals continued to limit gains.

Market participants remained cautious ahead of China’s annual National People’s Congress (NPC), which begins tomorrow, with investors closely watching policy signals from Beijing for clues on the outlook for the broader economy.

Sentiment has been mixed after official data showed China’s factory activity contracted for a second consecutive month in February, raising hopes for stronger policy support. However, environmental restrictions in key steelmaking hubs such as Tangshan have curtailed blast furnace operations, reducing near-term demand for iron ore.

Further pressure comes from high inventories, with portside iron ore stocks in China hovering near record levels of around 162 mln tons.

Geopolitical tensions in the Middle East, a major destination for Chinese steel exports, have also added uncertainty. Chinese steel traders have reportedly suspended offers to the region this week after major shipping carriers halted new bookings.

Meanwhile, major Chinese steelmaker Shagang kept its domestic long steel prices unchanged for early March sales, reflecting cautious market sentiment.

On the Dalian Commodity Exchange, the most-traded May iron ore contract rose 0.4pct to 752 yuan (USD 109) per ton, though it was down 0.2pct compared with the previous morning session close. Coking coal futures declined 0.23pct to 1,097 yuan (USD 159), while coke futures increased 0.66pct to 1,672 yuan (USD 242) per ton.

On the Shanghai Futures Exchange, rebar futures edged up to 3,071 yuan (USD 445) per ton, while HRC remained unchanged at 3,219 yuan (USD 466). Wire rod futures fell 0.63pct to 3,310 yuan (USD 480), and stainless steel futures slipped to 14,220 yuan (USD 2,061) per ton.

1 USD / 6.89 yuan