Iron ore futures consolidate

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended the day 0.53% higher at 952 yuan ($132.29) a metric ton, extending gains into a third consecutive session.

The benchmark February iron ore on the Singapore Exchange was, however, 0.46% lower at $129.3 a ton, as of 0725 GMT.

China kept benchmark lending rates unchanged at its monthly fixing on Monday following the decision to hold its medium-term lending facility rate steady last week, meeting expectations and reflecting Beijing’s limited room for monetary easing amid pressure on the yuan. The market is concerned about medium-to-long term demand outlook amid macroeconomic uncertainty, analysts at Huatai Futures said in a note. “Hot metal output stayed at a relatively low level compared to the same period a year before, but a downside room for ore prices might be limited as some mills still have the need to replenish feedstocks,” they added.

Chinese steelmakers typically replenish feedstock to maintain normal production during the week-long Lunar New Year holiday break, known for logistical disruptions. Market participants are currently betting on the demand outlook in the first half of the year, analysts at Galaxy Futures (GF) said in a note.