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Dalian iron ore prices rose on Tuesday on a technical support, after a steep monthly loss in October but poor demand outlook in China dented sentiment.
The most traded January iron ore on the Dalian Commodity Exchange (DCE) closed up 2.5% at 628 yuan ($86.30) a tonne, after dropping as much as 2.2% earlier in the session to 599.50 yuan, its lowest since July 22.
The contract has fallen 29% from its June peak of 890 yuan a tonne on COVID-19 curbs and a slowdown in the property sector in China. It fell 15.3% in October, its steepest monthly loss since February 2020.
“600 renminbi (Chinese yuan) is a psychological support level for the DCE contract,” said Marex analyst Zenon Ho.
On the Singapore Exchange (SGX), the December contract rose 0.3% at $77.40 a tonne, having shed over 50% off an April high above $160.
China’s factory activities in October shrank, weighing further on demand outlook for metals and suggesting a weaker economic recovery in the fourth quarter.
The property market in China continued its slump in October, with private data showing home prices and sales falling.
“Next targets will be 550 and then 500 yuan for DCE iron ore. But rebar has run out of support. The only (supporting) thing is mills saying they won’t deliver physical rebar or hot-rolled coil steel below 3,400 yuan,” Ho added.
The most-active rebar contract on the Shanghai Futures Exchange SRBcv1climbed 1.3% to 3,485 yuan a tonne, hot-rolled coil increased 1.7% to 3,485 yuan a tonne, wire rod advanced 1.4% to 4,187 yuan a tonne, and stainless steel edged up 0.3% at 16,725 yuan a tonne.
Coking coal rose 2.4% to 1,941.50 yuan a tonne, and coke advanced 1.1% to 2,460 yuan a tonne, having hit its lowest since July 26 earlier in the session at 2,367.50 yuan a tonne.