Market Outlook: Iron Ore Set to Secure Its Third Weekly Gain Amid Strong Demand and Hopes for Stimulus from China

Iron ore prices have headed for a third consecutive weekly gain, bolstered by strong demand stemming from steel manufacturers replenishing their stocks and expectations that China will provide more fiscal stimulus this month. However, high inventories at ports, falling steel margins, and concerns regarding next year's steel demand outlook continue to pose obstacles that limit gains.

The January iron ore contract on the Dalian Commodity Exchange (DCE) finished morning trading down 0.37% at 802 yuan/ton ($110.58), marking a rise of about 1% compared to last Friday's close. The benchmark January iron ore on the Singapore Exchange rose 0.63% to $104.65/ton at 07:22 GMT, reflecting an increase of 0.6% so far this week.

Analysts noted that hot metal production, typically used to gauge iron ore demand, has remained at relatively high levels, underscoring robust demand for the key steelmaking ingredient. Additionally, steel manufacturers have been in a rush to replenish stocks in preparation for consumption needs in February, further supporting ore prices.

The market is closely monitoring China's yet-to-be-scheduled Central Economic Work Conference, where senior leaders are expected to outline economic growth targets and plan the agenda for the upcoming year.

On the DCE, coking coal and coke dropped by 1.09% and 1.04%, respectively. At the Shanghai Futures Exchange, rebar fell by 0.79%, hot-rolled coil by 0.57%, wire rod by 0.81%, and stainless steel by 0.19%.