Market Outlook: Iron Ore Gains Amid Weaker Dollar and Pre-Holiday Supply Boost

Forex - Iron ore futures extended their gains into the second session with support from the weakening of the U.S. dollar and the resumption of overseas cargo restocking by Chinese steel producers to maintain production in January. The January iron ore contract at the Dalian Commodity Exchange (DCE) completed morning trading at 763.5 yuan/ton ($105.59), reflecting a 1.39% increase. The benchmark December iron ore on the Singapore Exchange traded at $100.05/ton, up by 0.91% as of 06:52 GMT. Analysts noted that data released over the weekend indicated an increase in the pace of local government bond issuance, signaling that more capital is available for real estate projects, thereby invigorating the iron market. A Chinese steel producer and a trader mentioned that some producers have begun purchasing overseas cargoes to meet production needs during the one-week Chinese New Year holiday in January, which has also supported the prices of the key component for steel production. Coking coal and coke prices at the DCE rose by 0.47% and 0.23%, respectively. Most steel indicators on the Shanghai Futures Exchange recorded gains, with rebar up 0.8%, hot-rolled coil up 0.55%, and stainless steel up 0.23%, while wire rod decreased by 0.11%.