Market Outlook: Iron Ore Rises on Optimistic Chinese Data, But Declining Demand Caps Gains

Iron ore futures rose with support from optimistic factory data in China, but signs of a slowdown in demand limited gains. The January iron ore contract on the Dalian Commodity Exchange (DCE) increased by 0.94% to 803.5 yuan/ton ($110.67) at 05:53 UTC. The benchmark January iron ore on the Singapore Exchange rose by 0.41% to $104.45/ton. China's factory activity showed the fastest growth in the last five months in November, with new orders—including those from abroad—leading to a strong increase in production. However, analysts indicated that demand for the key steel production component showed signs of softening, as cold weather disrupted construction activities in northern China, limiting upward movement. One trader noted that some steel producers had completed sea freight deliveries to meet production needs following the week-long Chinese New Year holiday. However, they also mentioned that storage of port loads had not yet begun. On the DCE, coking coal fell by 0.36% while coke rose by 0.11%. On the Shanghai Futures Exchange, rebar increased by 0.3%, hot-rolled coil by 0.77%, and wire rod by 0.52%, whereas stainless steel declined by 0.8%.