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Chinese iron ore futures extended declines on Thursday, as the market digested a lack of new stimulus measures and data showing weaker-than-expected bank lending last month.
The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 1.05% lower to 942 yuan ($132.00) a metric ton.
New bank lending in China jumped less than expected in November from the previous month, data showed late on Wednesday, even as the central bank keeps policy accommodative to support a feeble recovery in the world’s second-largest economy.
Restocking of iron ore is sluggish, said analysts, with mills struggling to generate profit and preferring to keep stocks low.
“Ore demand has been marginally weaker as reflected by a continuous fall in daily consumption of the imported cargoes as well as daily discharging volumes from ports,” analysts at Everbright Futures wrote in a note.
The benchmark January iron ore SZZFF4 on the Singapore Exchange added 0.25%, however, to $133.95 a ton, as of 0706 GMT, reversing Wednesday’s decline, aided by expectation that the rate hikes in the United States are over.
Other steelmaking ingredients also weakened, with coking coal DJMcv1 falling 3.34% to 1,881 yuan per ton, while coke DCJcv1 dipped 0.95%.
Steel benchmarks on the Shanghai Futures Exchange were down as a severe drop in temperatures and snow in many areas disrupted construction activity across north China.
Rebar SRBcv1 slipped 2.03%, hot-rolled coil SHHCcv1 fell 1.03%, wire rod SWRcv1 lost 0.59% while stainless steel SHSScv1 was little changed.
Cold weather continued to sweep China, with many areas in the south expected to see sharp drops in temperatures over the next few days.