Market Overview: Iron Ore Rises as Weak Credit Data Overshadows China's Stimulus Hopes

Iron ore futures rose for a second consecutive session as hopes for more financial support for China's real estate sector overshadowed weak credit lending data. The January iron ore contract on the Dalian Commodity Exchange (DCE) finished the morning session up 0.52% at 768.0 yuan/ton ($106.33). The benchmark December iron ore on the Singapore Exchange traded at $101.0/ton, up 0.48% as of 06:30 GMT.

According to data released on Monday, Chinese banks extended 500 billion yuan ($69.5 billion) in new loans last month, marking a sharp decline compared to September and falling short of analysts' expectations. The weak data followed consumer prices showing the slowest increase in the last four months in October and deepening deflation in producer prices.

The overall sentiment in China remained largely negative following a disappointing stimulus package announced by Beijing on Friday. However, reports yesterday from Bloomberg indicating that China is preparing to cut housing purchase taxes improved the mood somewhat. Analysts suggested that Friday's measures could lay the groundwork for local governments and state-owned enterprises to implement further financial incentives, which could play a significant role in stabilizing the real estate market in the future.

Meanwhile, iron ore stockpiles were reported to be at their highest level for this time of year. On the DCE, coking coal and coke rose by 0.66% and 1.17%, respectively. Most steel indicators on the Shanghai Futures Exchange strengthened, with rebar up 0.75%, hot-rolled coil increasing by 0.7%, and wire rod rising by 1%, while stainless steel fell by 0.8%.