Market Outlook: Iron Ore Volatile in Dalian Amid Cautious Chinese Stimulus

Despite hopes of more stimulus from China supporting the market, iron ore futures in Dalian traded within a narrow range due to weak trading resulting from the Christmas holiday in many regions.

The May iron ore contract at the Dalian Commodity Exchange (DCE) traded at 775 yuan/ton ($106.18) at 05:47 GMT, down 0.13%. The contract reached an intraday high of 782 yuan/ton earlier in the session.

The Singapore Exchange is closed today for Christmas. Analysts noted that "a cautious stance on demand outlook and high port stocks acted as headwinds limiting upside potential."

However, analysts also indicated that expectations for continued winter stocks among steel producers and a slowdown in the pace of hot metal production provided some support, suggesting that ore prices are likely to fluctuate throughout December.

In DCE, coking coal rose by 1.05%, while coke dropped by 0.23%. Most steel indicators on the Shanghai Futures Exchange recorded gains, with rebar increasing by 0.27%, hot-rolled coil by 0.09%, and wire rod by 0.94%, while stainless steel fell by 0.42%.

Analysts emphasized that there is a considerable contradiction in the supply and demand fundamentals of the steel market, stating, "Steel products continued to partially deplete stocks as construction steel consumption showed unusual resilience during a stagnant demand season due to increased capital flowing into construction projects."