Iron ore rangebound amid China rate cut hopes, Trump tariff plans
Updates with closing prices, analyst quote and details
By Gabrielle Ng
SINGAPORE, Nov 26 (Reuters) -Iron ore futures traded in a narrow range on Tuesday as a softer yuan bolstered hopes of a rate cut by China's central bank while higher tariffs loomed after a pledge by U.S. President-elect Donald Trump.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 0.32% higher at 783.0 yuan ($107.90) a metric ton.
The benchmark December iron ore SZZFZ4 on the Singapore Exchange was flat at $102.6 a ton as of 0803 GMT.
"The People's Bank of China (PBOC) allowed the USD/CNY to break above 7.25 overnight - a line in the sand it had been defending since late July," said Navigate Commodities managing director Atilla Widnell.
"As such, China's industrial metals complex is now pricing in growing expectations the PBOC will potentially cut reserve requirement ratios sooner rather than later."
The Chinese yuan on Monday fell to its weakest in nearly four months against the U.S. dollar CNH=D3, CNY=CFXS, following Trump's vow to slap an additional 10% tariff on all Chinese goods.
The Chinese economy is now in a much more vulnerable position given the country's prolonged property downturn, debt risks and weak domestic demand.
"China still faces severe structural headwinds to growth, but at the very least, fiscal and monetary policy settings are now more obviously injecting meaningful support," Westpac said in a separate note.
In October, the PBOC governor had flagged further cuts to the reserve requirement ratio for commercial lenders by the year-end.
Iron ore markets remain focused on upcoming Chinese meetings scheduled for December, including the Politburo meeting and Central Economic Work Conference, Westpac analysts said in a note.
Other steelmaking ingredients on the DCE lost ground, with coking coal DJMcv1 and coke DCJcv1 down 0.97% and 0.47%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange reversed earlier gains. Rebar SRBcv1 and hot-rolled coil SHHCcv1 lost 0.12%, stainless steel SHSScv1 shed 1.24%, although wire rod SWRcv1 strengthened almost 0.3%.
($1 = 7.2570 Chinese yuan)
Reporting by Gabrielle Ng; Editing by Subhranshu Sahu and Eileen Soreng
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