Iron ore weakens

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SINGAPORE- Iron ore futures weakened on Tuesday, surrendering gains from the previous session, as uncertainty surrounding top consumer China’s plans for fiscal stimulus weighed on the market while weaker steel margins further pressured prices.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 0.64 percent lower at 778.5 yuan ($109.11) a metric ton.

The benchmark December iron ore on the Singapore Exchange was 1.06 percent lower at $102.35 a ton.

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Market sentiment is swinging with policy expectations, said Chinese financial information site Hexun Futures.

There is great policy uncertainty as the National People’s Congress Standing Committee is scheduled to convene in early November, coinciding with the US presidential election, added Hexun Futures.

The Dalian contract hit its highest in more than a week on Monday, buoyed by renewed hopes of further fiscal stimulus from Beijing.

The China Iron and Steel Association’s statement that it would propose specific policies to reshape the sector in the face of weak demand supported yesterday’s gains in steel and iron ore prices, ANZ analysts said.

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