Iron ore futures rose were at CNY 780 per tonne, holding the rebound from the five-month low of CNY 755 on December 12th, as a pullback in output from major suppliers offset a muted demand backdrop for ferrous metals. Chinese steel mills remained with limited buying options for their iron feedstock as firms operating under rules set by the state-owned buyer CMRG banned the purchase of fines from BHP’s Jimblebar and Jingbao sources. This coincided with evidence of a slight improvement in margins for mills, driving hot metal production to inch higher late in the year since bottoming in mid-September. Still, ongoing pessimism for Chinese goods producers and constructors limited the rebound. The NBS construction PMI reflected a fourth consecutive contraction for the world’s largest ferrous metal consumer. Additionally, the near default for Vanke magnified concerns of insolvency for property developers.
