Iron ore futures retreat

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 1.3% lower at 795.5 yuan ($109.34) a metric ton. The contract has dipped 0.06% so far this week, snapping a three-week rise.

The benchmark January iron ore on the Singapore Exchange slipped 2.32% at $103.6 a ton, but gained 2.65% this week, as of 0330 GMT. “Markets were highly disappointed at the lack of concrete specifics from China’s Central Economic Work Conference, given such a promising start to the week from... the Politburo,” said Atilla Widnell, managing director at Navigate Commodities.

The letdown came despite Chinese authorities signalling the fine print on policy would be released in and around March 2025, Widnell added.

Beijing pledged on Thursday to increase its budget deficit, issue more debt and loosen monetary policy as it braces for heightened trade tensions ahead of a second Donald Trump presidency.

The remarks came in a readout of top Chinese leaders’ annual Central Economic Work Conference, held on Dec. 11-12. “With the recovery path for China still bumpy... we’ll struggle to see a long-term move higher for iron ore prices,” ING analysts said, adding that this will continue until the market sees signs of sustainable economic recovery and growth.

Also pressuring ore prices are high portside stocks, standing at above 150 million tons - the highest ever for this time of the year, ING said.

Other steelmaking ingredients on the DCE weakened, with coking coal and coke down 1.77% and 2.88%, respectively. Steel benchmarks on the Shanghai Futures Exchange posted losses. Rebar shed 1.55%, hot-rolled coil and wire rod dropped about 1.77% and stainless steel eased 0.46%.