Iron ore futures ease on mixed fundamentals

Iron ore futures declined on Thursday, snapping a recent upward trend as the market weighed the near-term outlook.

Iron ore futures had risen in previous sessions on the back of improving steel production and firm domestic steel demand in China, along with restocking ahead of the May holiday period. Ongoing Middle East tensions also supported prices by increasing energy and freight costs.

However, high portside inventories, despite recent declines, and rising global supply are expected to weigh on prices. Market participants also noted that developments involving BHP and China’s state-backed iron ore buying firm could add further pressure in the longer term.

Policy signals on energy conservation and decarbonization in heavy industries, including steel, have raised concerns over potential production curbs, which may limit iron ore demand. At the same time, tighter supply could support steel prices and help maintain margins for Chinese mills.

Chinese traders said steel spot prices remained largely stable with slight gains, supported by declining inventories of major finished steel products and improved downstream demand. However, some noted weaker transaction volumes compared with the previous day, raising concerns over demand sustainability.

On the Dalian Commodity Exchange, the most-traded September iron ore contract fell 0.32pct to 783.5 yuan (USD 114.8) per ton. Coking coal and coke futures declined by 0.63pct and 0.22pct to 1,257.5 yuan (USD 184) and 1,835.5 yuan (USD 269) per ton, respectively.

On the Shanghai Futures Exchange, rebar edged higher to 3,181 yuan (USD 466) per ton, while HRC rose 0.33pct to 3,385 yuan (USD 496) per ton. Wire rod slipped to 3,274 yuan (USD 480) per ton, while stainless steel increased 0.4pct to 14,905 yuan (USD 2,184) per ton.

1 USD / 6.83 yuan