Policymakers said
China would continue to introduce policies for boosting consumption and
promoting investment in a cabinet meeting on Wednesday, following mounting
economic woes with a prolonged property crisis, deflationary pressure and
slower growth in retail sales and industrial output.
The most-traded January iron ore on China's Dalian Commodity
Exchange (DCE) DCIOcv1 traded
0.41% higher at 739.5 yuan ($101.09) a metric ton, as of 0215 GMT.
In addition, a weakening yuan, the wide difference between spot
and futures prices and the remaining high level of hot metal output all provide
support to iron ore prices, analysts at Soochow Futures said in note.
The gloomy demand outlook amid the struggling property sector
and the looming steel production curbs, however, continued to act as headwinds
and limit upside room, analysts said.
The steelmaking ingredient's benchmark September contract SZZFU3 on
the Singapore Exchange was 0.11% lower at $100.7 a metric ton, pressured by the
hawkish comment from the U.S. Federal
Reserve minutes indicating further rate hikes may need to combat inflation.
Other steelmaking ingredients coking coal DJMcv1 and
coke DCJcv1 on
the DCE shed 0.98% and 0.19%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were broadly
lower despite heated market talks of the implementation of production
restrictions among mills in some regions.
Rebar SRBcv1 dipped
0.22%, hot-rolled coil SHHCcv1 fell 1.04%, wire rod SWRcv1 dropped
0.4% and stainless steel SHSScv1 eased 0.13%.
Some construction steel mills in East China's Jiangsu province
have started to cut production with a target to reduce output by between 20%
and 30% on the basis of the average in the first half of the year, analysts at
consultancy Mysteel said in recent reports.
A number of steelmakers in East China's Shandong, Central
China's Henan and North China's Tianjin also had plans of scaling down
production, according to Mysteel.
"The weakness in the steel futures market today indicated
that investors are excising caution before seeing large-scale enforcement of
production cuts," said Cheng Peng, a Beijing-based analyst at Sinosteel
Futures.