BEIJING- Iron ore futures gained on Monday, supported by upbeat factory data in top consumer China, but signs of faltering demand capped gains.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) climbed 0.94 percent to 803.5 yuan ($110.67) a metric ton.
The benchmark January iron ore on the Singapore Exchange added 0.41 percent at $104.45 a ton.
China’s factory activity expanded at the fastest pace in five months in November as new orders, including those from abroad, led to a solid rise in production, a private-sector survey showed, echoing an official survey on Saturday.
But demand for the key steelmaking ingredient showed signs of softening as colder weather disrupted construction activities in northern China, limiting upside room, said analysts.
The average daily hot metal output among steelmakers surveyed slid for a second consecutive week by 0.8 percent from the week before to 2.34 million tons in the week as of Nov. 29, data from consultancy Mysteel showed.
“Hot metal output is likely to eye further decline in December, but daily output will likely hover above 2.3 million tons,” analysts at Maike Futures said.
The hot metal output is typically used to gauge iron ore demand. Some steelmakers have completed procuring seaborne cargoes to meet production needs after the week-long Chinese New Year Holiday break, said a steelmaker and a trader, requesting anonymity as they are not authorized to speak to the media.
