Iron ore futures in China steadied on Tuesday after losses in the previous session, getting modest support from data showing the country’s economic slowdown was not as bad as investors had expected.
China’s economy grew 7.3 percent in the fourth quarter, a tad ahead of market forecasts for a 7.2-percent expansion and the same pace as the third quarter. But full-year growth came in at 7.4 percent, the slowest in 24 years.
“While some monthly indicators indeed showed modest upward momentum in nominal or even real terms, in general, the accelerations are not yet significant enough to meaningfully and sustainably accelerate broader economic growth,” Brian Jackson, China economist at IHS Global Insight, said in a note.
“Importantly, the challenges facing China’s economy remain as large or even larger compared to a year prior,” said Jackson, citing high housing inventories and heavy industrial overcapacity.
Iron ore for May delivery on the Dalian Commodity Exchange was up 0.2 percent at 504 yuan ($81) a tonne by midday.
Buying interest for spot iron ore cargoes in China remained tepid amid a soft steel market, traders said, keeping the benchmark price near its weakest since 2009.
“I have not seen any buying rush,” said an iron ore trader in Shanghai. “We ourselves are not keeping any stocks at the moment and we’re only dealing with reliable clients who we’re sure are able to pay.”
Iron ore for immediate delivery to China’s Tianjin port .IO62-CNI=SI slipped 0.3 percent to $67.80 a tonne on Monday, according to data compiled by The Steel Index.
The price of the steelmaking raw material fell 47 percent last year amid a supply glut, dropping to as low as $65.60 in December, its weakest since June 2009.
Rio Tinto , the world’s No. 2 iron ore miner, said fourth-quarter output rose 12 percent from a year earlier to 79.1 million tonnes, meeting its full-year target of 295 million tonnes.
Increased production from big producers such as Rio helped lift global supply of the commodity at a time when the Chinese economy slowed. China buys around two-thirds of global seaborne iron ore.
China’s crude steel output hit a record high of 822.7 million tonnes in 2014, but annual production growth slowed sharply to 0.9 percent from 7.5 percent in 2013.