The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.17% lower at 800.5 yuan ($110.14) a metric ton. The benchmark January iron ore on the Singapore Exchange was down 1.51% at $103.75 a ton, as of 0700 GMT.
China is not wedded to achieving specific GDP growth rates, and a pace of less than 5% for the economy is acceptable as there is no need for the “worship of speed”, state newspaper People’s Daily said on Wednesday. China’s Central Economic Work Conference will meet this month, at a yet-to-be-announced date, and top leaders will set economic growth targets and plan next year’s agenda.
Investors and traders had been expecting Beijing to roll out more stimulus, said analysts.
“We think iron ore is currently overvalued. Therefore, a downward correction is unavoidable,” said Cheng Peng, an analyst at Sinosteel Futures. The anticipation of growing shipments, driven by rebounding prices and some miners’ motivation to meet annual targets, is also weighing on prices, said analysts.
China’s Dalian Commodity Exchange said on Wednesday it would lower the daily price limits, or the maximum trading range, to 9% from 11% and adjust trade margins for speculative transactions to 11% from 15%, effective from the settlement on Dec. 6. “The move will increase speculative transactions, which will likely lift price volatility,” analysts at Jinyuan Futures said in a note.
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