Dalian iron ore dips on softening demand, higher stocks; set for second weekly loss

By Amy Lv and Lewis Jackson

Dalian iron ore slipped on Friday and were set for a second weekly loss, weighed down by easing demand in top consumer China and higher portside stocks, although Beijing's pledge of fiscal stimulus and stabilising property market capped losses.

The most-traded iron ore contract on China's Dalian Commodity Exchange (DCE) TIO1! closed daytime trade down 0.33% to 760.5 yuan ($107.79) a metric ton, a weekly fall of 0.8%.

The benchmark January iron ore (SZZFF6) on the Singapore Exchange rose 0.5% to $101.95 a ton as of 0700 GMT, benefited from softer dollar after the U.S. Federal Reserve cut interest rates. It has declined 1.4% so far this week.

The seasonally weakening steel demand, with low temperature hindering outdoor construction activities in northern regions, has dented consumption for feedstocks including iron ore.

Average daily hot metal output, a gauge of iron ore demand, slid 1.3% from the week before to a three-month low at 2.29 million tons by December 11, heading for a fourth straight weekly fall, data from consultancy Mysteel showed.

Meanwhile, portside iron ore inventory rose 0.9% on-week to 154.31 million tons, the highest since March 2022, per Mysteel data.

However, losses were limited by a boost from Chinese leaders' pledge on Thursday to maintain a "proactive" fiscal policy next year that would stimulate both consumption and investment to maintain high economic growth.

Beijing also said it would stabilise property market with city-specific measures. Protracted property market downturn has dragged demand for steel products.

Other steelmaking ingredients, coking coal NYMEX:ACT1! and coke (DCJcv1) tumbled 4.33% and 3.06%, respectively, pressured by a supply glut created by falling demand and swelling supply.

Steel benchmarks on the Shanghai Futures Exchange languished amid lower raw materials costs. Rebar RBF1! dipped 0.87%, hot-rolled coil EHR1! shed 0.83%, wire rod (SWRcv1) fell 1.92% and stainless steel HRC1! lost 0.68%.

($1 = 7.0552 Chinese yuan)