Iron ore moves sideways as solid steel outlook counters soft China data
By Gabrielle Ng
SINGAPORE, Nov 28 (Reuters) -Iron ore futures prices traded within a narrow range on Thursday after investors balanced stronger prospects for China's steel market with weaker economic data from the world's top consumer, limiting significant price movement in the market.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 traded 0.32% higher at 789.0 yuan ($108.91) a metric ton, as of 0235 GMT.
The benchmark December iron ore SZZFZ4 on the Singapore Exchange was flat at $103.8 a ton.
"The steel sector has shown signs of improvement in recent months," ANZ analysts said in a note.
"Strong exports and falling inventories have helped, while gains in steel output have continued through November."
Cumulative losses in China's steel industry shrank to 23 billion yuan in January-October from 34 billion yuan over the first nine months of the year, ANZ said, citing National Bureau of Statistics data.
"Improved steel mill profits added to the improved tone, with the market focused on the Chinese Politburo meeting due early in December and the Central Economic Work Conference mid-December," Westpac analysts said.
China is both the world's top consumer and producer of the metal.
Still, the country's industrial profits extended declines in October to fall 10% year-on-year, weighed down by deflation pressures and soft demand in its weakening economy.
Fresh headwinds from higher U.S. tariffs could also threaten China's industrial sector next year, reducing export earnings.
Chinese state media on Tuesday warned U.S. President-elect Donald Trump his pledge to impose additional tariffs on China's imports could drag the world's top two economies into a mutually destructive tariff war.
Other steelmaking ingredients on the DCE edged lower, with coking coal DJMcv1 and coke DCJcv1 down 0.16% and 0.68%, respectively.
Steel benchmarks on the Shanghai Futures Exchange posted marginal gains. Rebar SRBcv1 was flat, hot-rolled coil SHHCcv1 added about 0.1%, wire rod SWRcv1 advanced 0.77% and stainless steel SHSScv1 edged 0.14% higher.
($1 = 7.2448 Chinese yuan)
Reporting by Gabrielle Ng; Editing by Sherry Jacob-Phillips
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