Chinese
steel benchmarks also retreated as investors across asset class awaited the
U.S. inflation report, due later in the day, and policy signals from the
Federal Reserve the next day
On the
Singapore Exchange, the steelmaking ingredient's benchmark January contract
slumped 2.4% to $106.85 a tonne.
By Enrico Dela Cruz
Dalian and Singapore iron ore futures fell on Tuesday as
traders curbed optimism about China demand prospects in 2023, locking in some
of the recent gains while top steel producer China grapples with
spreading COVID-19 infections.
Chinese steel benchmarks also retreated as investors across asset class awaited
the U.S. inflation report, due later in the day,
and policy signals from the Federal Reserve the next day.
The
most-traded iron ore for May delivery on China's Dalian Commodity Exchange shed as much as
2.5% to 790 yuan ($113.17) a tonne in early trade.
On the Singapore Exchange, the steelmaking ingredient's benchmark January
contract slumped 2.4% to $106.85 a tonne.
"The worsening health and current economic news is now pushing back
somewhat against the exuberance evident in the past few weeks on the evidence
of China beating the retreat on its hitherto zero-COVID stance," said Ray
Attrill, head of FX strategy within the fixed income, currencies and
commodities division of National Australia Bank.
Indicating a rapid spread of infections, people queued outside fever clinics at
Chinese hospitals for COVID-19 checks on Monday, as mobility restrictions have
been eased, marking a significant shift in the country's containment strategy.
Also weighing on sentiment, new bank lending in China rebounded less than
expected in November from the previous month amid COVID flare-ups.
Rebar on the Shanghai Futures Exchange was down 0.6%, as of 0230 GMT,
hot-rolled coil fell 0.7%, wire rod dipped 0.9%, and stainless steel dropped
0.4%.
The pullback in steel prices, however, was modest as traders anticipated
further policy moves to support China's property sector, which may be announced
during a Central Economic Work Conference scheduled to start on Dec. 15,
analysts said.