BEIJING- Iron ore futures traded in a tight range on Tuesday, as investors weighed recovery in shipments from major supplier Australia against expectations of more stimulus from top consumer China, which could boost demand.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) climbed 0.75 percent to 804 yuan ($110.59) a metric ton as of 0241 GMT.
However, the benchmark March iron ore on the Singapore Exchange eased 0.38 percent to $105.3 a ton, pressured by a stronger US dollar making greenback-priced commodities more expensive for holders of other currencies.
Iron ore shipments from Australia were expected to pick up after major ports reopened following the tropical cyclone Zelia, pressuring prices.
“With the resumption of exports from Australia’s biggest iron ore port, the market is shifting its focus to broader demand dynamics,” ANZ analysts said.
According to GF Futures, hot metal output, a gauge for iron ore demand, will likely hover around 2.28 million tons, close to the latest assessment as of February 14 from consultancy Mysteel, by late February.
But market participants saw it picking up gradually as more steel mills resumed production after China’s Lunar New Year break.
“A slow recovery in ore demand will keep a lid on upside of prices,” GF Futures added.
However, ANZ analysts flagged that “there is speculation that the upcoming “Two Sessions” in China will provide more proactive policies aimed at stimulating consumption”.
