Iron ore futures rebounded on Wednesday, as better-than-expected industrial profits data in top consumer China buoyed sentiment, although lingering demand concerns amid persistent weakness in the country’s crisis-hit property market curbed gains.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 0.59% higher at 846.5 yuan ($115.89) a metric ton.
The benchmark October iron ore SZZFV3 on the Singapore Exchange rose 0.82% to $115.95 a ton at 0701 GMT.
Profits at China’s industrial firms in August surged 17.2% year-on-year, compared to a 6.7% decline in July, data from the National Bureau of Statistics (NBS) showed.
China’s central bank said it would implement monetary policy in a “precise and forceful” manner to support economic recovery.
The key steelmaking ingredient recouped some losses recorded in the previous two sessions ahead of the upcoming holiday break after a flurry of pre-holiday restocking ended.
Markets in top steel producer China will be closed for holidays during Sept. 29-Oct. 6.
The market is still vulnerable to shrinking steel margins and “renewed debt problems in China’s property developers”, analysts at ANZ bank said in a note.
A major group of offshore creditors of China Evergrande Group 3333.HK is planning to join a court petition to liquidate the cash-strapped developer if it doesn’t submit a new debt revamp plan by next month, Reuters reported, citing two sources familiar with the matter.
Other steelmaking ingredients on the DCE softened, with coking coal DJMcv1 and coke DCJcv1 falling 0.42% and 1.53%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were broadly weaker. Rebar SRBcv1 declined 0.41%, hot-rolled coil SHHCcv1 dipped 0.42%, and stainless steel SHSScv1 shed 1.87%.
The downstream steel demand was weak, and risk-off sentiment grew ahead of the holiday break,” analysts at Sinosteel Futures said in a note.