MARKET OUTLOOK - Iron Ore Fluctuates Within Narrow Range as Investors Await Clues on New Chinese Stimulus

Forex - Iron ore futures held in a narrow range today as optimistic industrial data from China boosted sentiment; however, gains were limited as investors awaited further hints on stimulus from Beijing next week. The January iron ore contract on the Dalian Commodity Exchange (DCE) reached an intraday high of 789.5 yuan per ton in early trading but finished the morning session down 0.19% at 783 yuan per ton ($109.96).

The benchmark December iron ore on the Singapore Exchange traded sideways at $103.7 per ton as of 06:53 GMT. Both benchmarks rose early in the session after official data indicated that China's manufacturing activity expanded in October for the first time in six months, suggesting that Beijing's recent stimulus measures were helping the beleaguered economy.

However, gains moderated as investors adopted a cautious stance regarding additional stimulus measures ahead of next week's meeting of the Standing Committee of the National People's Congress (NPC), China's top legislative body. Analysts noted that with more shipments expected, supply pressure is likely to persist, as demand for the key steel production component remains robust due to steelmakers increasing production when they can generate profits, creating a mixed fundamental outlook.

Coking coal and coke at the DCE fell by 1.99% and 1.17%, respectively. Steel indicators on the Shanghai Futures Exchange weakened, with rebar down 0.2%, hot-rolled coil down 0.08%, wire rod down 0.75%, and stainless steel down 0.62%.