Iron ore retreats as investors await stimulus signal from key China meeting
By Gabrielle Ng
SINGAPORE, July 16 (Reuters) -Iron ore futures retreated on Tuesday as investors and traders grew wary of prospects of forceful stimulus from top consumer China from its third plenum following a slew of weaker-than-expected economic data.
The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended morning trade 0.24%lower at 830 yuan ($114.25) a metric ton, following a rise of more than 1% on Monday.
The benchmark August iron ore <SZZFQ4> on the Singapore Exchange was down nearly 0.5% at $108.2 a ton, as of 0355 GMT.
There is little expectation for the plenum to provide any relief to iron ore prices, said ING analysts in a note.
Beijing's focus will likely be on property completions and lowering the inventories, while new construction activity, which iron ore and steel rely on, should be low on the priority list, added ING.
Analysts expect cutting debt and boosting confidence to be the main focus of a third plenum in Beijing this week, although solving one of those problems may make it difficult to fix another. The plenum is a key Communist party leadershipmeeting that focuses on long-term economic reforms.
Hopes of more stimulus had mounted after China's second-quarter economic growth and new bank lending in June missed expectations.
Weighing down ore prices is also the expectation of more arrivals in the coming weeks.
One of the world's leading iron ore suppliers Rio Tinto RIO.AX, RIO.L reported a 3% rise in its second-quarteriron ore shipments from the previous three-month period thanks to improved weather conditions.
Other steelmaking ingredients on the DCE were mixed, with coking coal DJMcv1 down 0.4%, while coke DCJcv1 edged up 0.2%.
Most steel benchmarks on the Shanghai Futures Exchange recorded marginal gains. Rebar SRBcv1 added 0.1%, hot-rolled coil SHHCcv1 ticked up 0.2%, stainless steel SHSScv1 rose 0.2%, while wire rod SWRcv1 dipped 0.3%.
($1 = 7.2648 Chinese yuan)
Reporting by Gabrielle Ng and Amy Lv; Editing by Sohini Goswami
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