• Iron ore prices for 63.5% content remained near $115, close to a two-month high.

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• Concerns of lower demand and struggling recovery in China impacted prices.
• Possibility of stimulus measures for the construction sector supported price stability.
• Concerning data, including contraction in manufacturing PMI and weaker imports, affected market sentiment.
• Hopes of stimulus measures by the Chinese government boosted demand expectations.
• PBoC injected liquidity and cut key interest rates to ease developers’ debt struggles.

The macro perspective of the Iron Ore 62% Fe Futures (China TSI Futures) indicates a 4.6% decline in the year, signaling a downside cycle as the market encountered selling around the upper macro balance extreme. The current price is around $111.70.

On a quarterly basis, the market showed supportive absorption at prior swing lows, suggesting a potential establishment of a balanced price range. This outcome will depend on the development of the global monetary policy path, which may put pressure on the market with a higher dollar. However, the Chinese stimulus measures could act as a supportive factor for iron ore prices in the coming quarters.

In the monthly perspective, core long buyers were identified at the December swing failure pattern from the previous year, aiming for a balanced price range and targeting the swing highs of this year.

On a weekly basis, there was a slight decrease of 0.8% in the previous week, indicating a mild bearish tendency for the upcoming week. Overall, any dovish hints from the global monetary policy front could provide support for the market, while weakness in the dollar could benefit and boost the prices of iron ore.

New core buyers could potentially emerge below the $100 level, which acts as a key support level at present. The market is exhibiting a tendency to establish a balanced price range on the weekly interval. The direction of this range will depend on the inflow of economic data, which will help determine the trajectory of the interest rate cycle.

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