Iron ore prices were little changed onMonday as gains aidedby healthy fundamentals and stimulus werepartly offset by fears of possible government supervision in top consumer China following the recent price rally and narrowing steel margins.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime traded almost flat at 925 yuan ($127.00) a metric ton.
The benchmark December iron ore on the Singapore Exchange was 0.33%higher at $123.35a ton, as of 0706 GMT.
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Prices of the key steelmaking ingredient have found support from Beijing’s rolling out more stimulus to shore up its economy.
China will accelerate the issuance and use of government bonds, state-run news agency Xinhua reported on Sunday, citing an interview with new finance minister Lan Foan.
This came after it had approved in late October a 1 trillion yuan sovereign bond issue and passed a bill to allow local governments to frontload part of their 2024 bond quotas.
Beijing has issued 3.46 trillion yuan, or 91% of the annual total, of special bonds in the first nine months of 2023.
Also, the prospect of an end to tighter monetary policies helped boost sentiment across the industrial metals complex, analysts at ANZ bank said in a note.
Chinese authoritiestypically will step up supervision of the iron ore market after persistent price gains, with the latest one in September.
Iron ore prices usually face some downward pressure after the state planner says it will strengthen supervision of the futures and spot markets.
Other steelmaking ingredients also gained, with coking coal and coke on the DCE up 2.13% and 1.31%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were slightly higher. Rebar climbed 0.58%, hot-rolled coil rose 0.28%, wire rod added 0.15% and stainless steel advanced 1%.
Source: Reuters (Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Sohini Goswami)