Dalian iron ore up, SGX prices slip as traders assess demand outlook

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China announced on Monday that inbound travelers would no longer have to go into quarantine from Jan. 8.

By Enrico Dela Cruz

Iron ore futures were mixed on Wednesday, with the Singapore benchmark price retreating from a five-month high, as traders assessed demand prospects taking into account China's move to unwind COVID controls and a looming global recession.

The most-traded May iron ore on China's Dalian Commodity Exchange ended morning trade 0.6% higher at 834.50 yuan ($119.64), after initially touching 838.50 yuan, its strongest since Dec. 16.

On the Singapore Exchange, the steelmaking ingredient's most-active January contract was down 0.4% at $112.95 a tonne, as of 0400 GMT. It vaulted on Tuesday to the highest since late July above $114.

China announced on Monday that inbound travelers would no longer have to go into quarantine from Jan. 8. It will resume issuing visas for mainland residents to travel overseas also beginning Jan. 8.

Top steel producer and iron ore consumer China's strict COVID containment policy has curbed industrial activity and domestic demand, and last month ignited public unrest.

"The positive impact of these easing measures should go beyond international travellers," said ING Greater China Chief Economist Iris Pang.

"This should increase mobility within the country from the first quarter of 2023, and therefore consumption as well."

However, spikes in China's COVID cases and the holiday season that runs until after next month's Spring Festival could curb iron ore and steel prices in the near term, analysts said.

China's steel exports, meanwhile, also face downside risks from an expected economic downturn in the United States and Europe.

"There will be fall in external demand. Export-related activities, including manufacturing, should slow,...

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