Iron ore futures declined on Tuesday amid concerns that growth in Chinese steel production may be peaking, while high port-side inventories and rising global iron ore supply also pressured market sentiment.
According to data from the China Iron and Steel Association (CISA), average daily crude steel production among member mills during the last ten days of April totaled 2.036 mln tons, down 3.6pct compared to the previous ten-day period.
Market sentiment was also weighed down by high port-side iron ore inventories in China and increasing global iron ore supply.
However, activity in the physical steel market remained relatively firm. Chinese steel traders said downstream demand remained stable in the near term, supporting current steel price levels despite uncertainty over the sustainability of the recent price increase trend.
Several major Chinese steel producers raised flat steel prices following Baosteel’s latest price increase announcement. Long steel producer Shagang also increased long steel prices by 50 yuan (USD 7) per ton for mid-May sales.
Market participants noted that most Chinese steel mills continue to maintain positive margins, with some traders viewing Tuesday’s decline in futures prices as a technical correction.
On the Dalian Commodity Exchange, the most-traded September iron ore contract decreased by 0.98pct to 812.5 yuan (USD 119.6) per ton. Coking coal and coke futures declined by 4.58pct and 2.78pct to 1,241 yuan (USD 183) and 1,803 yuan (USD 265) per ton, respectively.
On the Shanghai Futures Exchange, rebar futures declined by 0.82pct to 3,255 yuan (USD 479) per ton, while HRC futures fell by 0.57pct to 3,471 yuan (USD 511) per ton. Wire rod futures dropped by 1.39pct to 3,395 yuan (USD 500) per ton, while stainless steel futures decreased by 0.3pct to 15,135 yuan (USD 2,228) per ton.
1 USD / 6.79 yuan
| Item | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
|---|---|---|---|
| Wire Rod | 3,395.00 | ▼ -1.39 | ▼ -1.77 |
| Hot Rolled Coils | 3,471.00 | ▼ -0.57 | ▼ -0.75 |
| Rebar | 3,255.00 | ▼ -0.82 | ▼ -0.95 |
| Stainless Steel | 15,135.00 | ▼ -0.30 | ▼ -0.33 |
| Iron ore | 812.50 | ▼ -0.98 | ▼ -1.23 |
| Coke | 1,803.00 | ▼ -2.78 | ▼ -3.61 |
| Coking Coal | 1,241.00 | ▼ -4.58 | ▼ -5.48 |