FX.co ★ Iron Ore Holds Firm on Strong Demand

Iron ore futures are currently trading around CNY 820 per ton, maintaining levels close to the highest seen in nearly a year. This trend is bolstered by robust demand signals from China, the world's largest consumer. Ahead of the Lunar New Year in February, a period typically marked by a slowdown in activity, steelmakers are actively replenishing their inventories. The supply dynamic remains favorable as recent industry data indicate reduced shipments from Australia and Brazil and iron ore inventories at Chinese steel mills are lower compared to last year. Market sentiment has been further strengthened by anticipation of extra policy support, following a meeting held by China's cabinet on Friday. During this meeting, a package of fiscal and financial measures was discussed, including initiatives aimed at boosting household consumption. As investors look for more clarity on future prospects, this week's trade data will be pivotal in shaping the market outlook.