Market Outlook: Iron Ore Strengthens as Traders Look for More Clues in the New Year

Forex - Iron ore futures moved within a narrow range as market participants awaited further clues about the trading outlook for the new year, overshadowed by mixed signals from China. The May iron ore contract on the Dalian Commodity Exchange (DCE) was trading at 783 yuan per ton ($107.27) at 05:36 GMT, up 0.77%. The benchmark February iron ore on the Singapore Exchange rose 0.35% to $100.85 per ton after falling to $99.15 per ton earlier in the session. Chinese markets were closed yesterday.

Today, China's factory activity grew at a slower pace than expected in December. This situation, combined with concerns that the new U.S. President Donald Trump will raise tariffs, has heightened hopes that Chinese officials will implement additional stimulus measures by 2025 due to negative impacts. The constant decline in demand in recent weeks, as steel producers undertake more equipment maintenance until the end of the year, has been a windfall for the prices of key components in steel production.

One analyst stated, "Hot metal production is likely to fall further this week. We expect iron ore prices to move between $90 per ton and $100 per ton before the Chinese New Year holiday." Analysts also noted that the raw material replenishment for steel producers' production needs has nearly come to an end during and after the Chinese New Year holiday, which potentially indicates a lower purchasing appetite for spot cargoes in the coming weeks.

Coking coal and coke on the DCE rose by 1.99% and 0.52%, respectively. In the Shanghai Futures Exchange, rebar increased by 0.42%, hot-rolled coil by 0.23%, and wire rod by 0.42%, while stainless steel dropped by 0.97%.