Iron ore futures retreated on Wednesday ahead of China’s Two Sessions meeting which is scheduled to convene tomorrow. Some profit-taking activities could be attributed to the decline as investors await the annual meeting for news of fresh impetus.
Iron ore has enjoyed a stellar run of late, gaining over $13 since the start of the month. Supply-side concerns, robust demand, and speculative trading on further fiscal stimulus measures from China have been the main drivers for the rally.
“Adding to positive sentiment was China flagging more stimulus at the upcoming National People’s Congress,” said Tapas Strickland, director of economics at National Australia Bank in Sydney, citing China’s plans to develop its western regions.
The most-active June contract was seen trading between 93.5 and 94.0 during the early London morning session. Jul also traded as low as 91.35 while quarterly spreads narrowed significantly.