Iron ore at near one-month low on concerns over China demand, Fed's tempered outlook

By Amy Lv, Colleen Howe

BEIJING, Dec 19 (Reuters) - Prices of iron ore futures fell to a nearly one-month low on Thursday, as concerns around demand outlook in top consumer China and the U.S. Federal Reserve's outlook for interest rate cuts weighed on sentiment.

The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 traded 1.97% lower at 771.5 yuan ($105.70) a metric ton, as of 0258 GMT, after hitting the lowest level since Nov. 22 at 767.5 yuan a ton earlier in the session.

The benchmark January iron ore SZZFF5 on the Singapore Exchange shed 1.35% to $101.3 a ton, as of 0248 GMT. It touched the lowest level since Nov. 25 at $100.9 a ton earlier.

"We've long anticipated this correction, as the sentiment-driven bubble around China's Central Economic Work Conference was eventually going to burst with no concrete stimulus measures outlined until March 2025," said Atilla Widnell, managing director at Navigate Commodities.

"This week has seen a perfect storm of loosening supply- and demand-side fundamentals with BHP resuming production from its South Flank mine in Western Australia while mills in China are also heard to be scaling back production."

BHP BHP.AX, one of the world's leading iron ore suppliers, resumed operations at two mines in Western Australia after a pause due to heavy rains, alleviating supply worries.

"Also, fears over the health of China's property developer sector are rearing their ugly head as financial markets question the liquidity and solvency of China Vanke - the last remaining (state-owned) jewel in this sector's crown," Atilla said.

The commentary from the Fed that next year will see fewer rate cuts also pressured broad commodities, said analysts. The central bank's policymakers now expect only 50 basis points of rate cuts in 2025 and in 2026, according to the updated dot plot.

Other steelmaking ingredients on the DCE retreated, with coking coal DJMcv1 and coke DCJcv1 down 3.44% and 1.27%, respectively.

Most steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar SRBcv1 lost 1.74%, hot-rolled coil SHHCcv1 slid 1.61%, and stainless steel SHSScv1 fell 1%, while wire rod SWRcv1 added 0.48%.

($1 = 7.2989 Chinese yuan)

(Reporting by Amy Lv and Colleen Howe; Editing by Varun H K)

((Amy.Lv@thomsonreuters.com;))