Iron ore price rises on pre-holiday restocking, China stimulus hopes
"Winter restocking of iron ore among steel mills is still underway, so we believe ore prices will find some support in the near term," analyst says.
Iron ore futures tumbled in Singapore, extending a stretch of volatile trading amid deepening anxiety over Chinese demand. Base metals also fell.
The steelmaking ingredient has swung between gains and losses as investors attempt to gauge what’s next after a 25% slump in prices so far this year. The absence of strong policy signals from Beijing has fueled uncertainty on whether construction activity will pick up.
Iron ore was down 2.6% to $105.75 a ton as of 12:20 p.m. in Singapore, still higher than the nine-month low of $97 that it hit last week.
“Investors are very cautious about the demand outlook,” said Wei Ying, an analyst at China Industrial Futures Ltd. “Prices fall whenever there are signs of demand weakness” and steel-trading volumes in China have faltered again, she said.
Chinese steel consumption has been battered by the nation’s years-long property crisis, and the weak start to 2024 has seen iron ore inventories piling up at ports. The spot price of rebar — a popular construction steel product — is at the lowest in almost seven months.
Aluminum dropped from its highest close since early January on the London Metal Exchange. It fell 0.3% to $2,318 a ton as copper, zinc and nickel also retreated.
“The rally in base metals prices has gone ahead of real demand,” said Jiang Hang, head of trading at Yonggang Resources Co. “Chinese demand has been badly hit after prices rose especially copper.”
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