Iron ore futures surged on Tuesday, buoyed by improved market sentiment, yet they recorded a significant yearly decline attributed to ongoing economic challenges and weak market fundamentals.
Optimism followed Chinese President Xi Jinping’s statement that the country’s GDP is expected to grow by around 5pct in 2024. Adding to this, the World Bank’s latest China Economic Update revised its forecast for China’s 2024 economic growth to 4.9pct, up slightly from its June estimate of 4.8pct.
Meanwhile, Chinese steel mills engaged in restocking iron ore ahead of the Lunar New Year holiday beginning January 28, further supporting the market.
Despite these positive signals, challenges remain. China’s official Purchasing Managers’ Index (PMI) for December dropped to 50.1 from November’s 50.3, signaling sluggish economic momentum. Similarly, the steel industry’s PMI declined for a second consecutive month to 47.5 in December, falling back into contraction territory from 50.6 in November, as reported by the CFLP Steel Logistics Professional Committee.
Throughout 2024, iron ore demand faced headwinds from higher port inventories, weak profit margins for steel mills, and a troubled property sector, the latter being a major steel consumer. Analysts remain cautious about a meaningful recovery in 2025, warning that a potential escalation in U.S.-China trade tensions could further dampen demand.
On the Dalian Commodity Exchange, iron ore futures rose 1.17pct to 779 yuan (USD 106.7) per ton, though they have declined by over 20pct compared to the closing of last session of 2023.
Coke and coking coal futures gained 1.43pct and 0.91pct, reaching 1,812 yuan (USD 248) and 1,160.5 yuan (USD 159) per ton, respectively, but both saw steep annual losses of 27.2pct and 38.5pct.
On the Shanghai Futures Exchange, rebar futures increased 0.39pct to 3,309 yuan (USD 453) per ton, while HRC futures edged down 0.09pct to 3,418 yuan (USD 468). Wire rod futures gained 0.08pct to 3,550 yuan (USD 486), while stainless steel futures declined 0.35pct to 12,915 yuan (USD 1,769).
Compared to the final trading session of 2023, rebar and HRC dropped by about 17pct, wire rod fell 16.4pct, and stainless steel futures slid 5.6pct.
1 USD / 7.3 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
Difference from Last Trading Session of 2023 (pct) |
| Wire Rod | 3,550 |
0.08 |
0.56 |
-16.47 |
| HRC | 3,418 |
-0.09 |
-0.44 |
-16.92 |
| Rebar | 3,309 |
0.39 |
-0.24 |
-17.32 |
| Stainless Steel | 12,915 |
-0.35 |
-0.81 |
-5.59 |
| Iron Ore | 779 |
1.17 |
0.45 |
-20.43 |
| Coke | 1,812 |
1.43 |
0.75 |
-27.27 |
| Coking Coal | 1,160.5 |
0.91 |
0.26 |
-38.52 |
