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Iron ore futures up on Friday amid demand prospects; steel futures drop
Times:[ 2019-12-16 Author:admin Hit:
China's iron ore futures ended a choppy session higher on Friday on hopes of increased demand as Beijing vowed to keep economic policies stable yet more effective to help achieve next year's growth target.

The Dalian Commodity Exchange's most-traded iron ore contract, with a May 2020 expiry, closed up 0.3pct at 653.50 yuan (USD 92.84) a ton. The benchmark rose 5.6pct from last week, its fifth consecutive weekly gain.

On the Singapore Exchange, the front-month January 2020 contract was up 0.5pct at USD 92.93 a ton.

China's policy direction in 2020 is "quite favourable to commodity demand", with steelmaking raw materials such as iron ore and coking coal among those likely to benefit the most, said Helen Lau, mining and metals analyst at Argonaut Securities.

The "work plan", and the possible de-escalation of trade tensions between Beijing and Washington as old tariffs may be reduced and new ones get delayed, would lend support to Chinese exports next year, Lau said.

Keeping iron ore's gains in check, demand for the material in the short term may weaken as fresh steel production curbs loomed in China's biggest steelmaking region of Hebei.

The "orange smog alert" issued by Hebei province, home to the country's top steelmaking cities, takes effect from Friday. The alert requires companies including steel mills to take action to cut emissions, even restrict production in some cases, amid adverse weather conditions that could worsen pollution.

Benchmark spot 62pct iron ore for delivery to China was steady at USD 94.80 a ton on Thursday, the highest since Sept. 18 this year.

The most-traded construction steel rebar contract on the Shanghai Futures Exchange slipped 0.3pct, while hot-rolled steel coil slumped 0.7pct.

Dalian coking coal edged up 0.2pct but Dalian coke dropped 0.4pct.

Shanghai stainless steel was down 0.2pct.