Iron ore futures post gains on Tuesday, supported by a continued rally in coking coal prices, although the broader outlook for the steelmaking raw material remained pressured by concerns over weakening steel demand and ample supply.
Market sentiment was supported by stable blast furnace operating rates in China as mills resumed production following scheduled maintenance. However, market participants remain concerned that higher steel output could increase supply at a time when seasonal demand is slowing, potentially weighing on finished steel prices and mill profitability.
Iron ore also continues to face pressure from rising seaborne supply and elevated port inventories.
Meanwhile, coking coal futures extended gains for a second consecutive session amid supply concerns linked to stricter mine safety inspections in Shanxi following a fatal mining accident last month. The strength in coking coal prices provided support to other ferrous futures, including iron ore.
Some analysts noted that higher coking coal prices could encourage Chinese mills to increase purchases of high-grade iron ore, as it allows steel mills to reduce coke consumption in the blast furnace.
Major Chinese producer Shagang kept long steel prices unchanged for early June sales while raising HRC prices by 100 yuan per ton, highlighting relatively stronger sentiment in the flat steel segment.
On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 0.77pct to 786.5 yuan (USD 116.3) per ton. Coking coal and coke futures increased 1.19pct and 0.35pct to 1,362.5 yuan (USD 201) per ton and 1,979 yuan (USD 293) per ton, respectively.
On the Shanghai Futures Exchange, rebar futures gained 0.22pct to 3,180 yuan (USD 470) per ton, while HRC futures edged up to 3,399 yuan (USD 502) per ton. Wire rod futures fell 1.3pct to 3,351 yuan (USD 495) per ton, whereas stainless steel futures advanced 1.82pct to 15,065 yuan (USD 2,227) per ton.
1 USD / 6.76 yuan
| Item | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
|---|---|---|---|
| Wire Rod | 3,351.00 | ▼ -1.30 | ▼ -1.40 |
| Hot Rolled Coils | 3,399.00 | ▲ 0.06 | ▼ -0.03 |
| Rebar | 3,180.00 | ▲ 0.22 | ▲ 0.09 |
| Stainless Steel | 15,065.00 | ▲ 1.82 | ▲ 1.43 |
| Iron ore | 786.50 | ▲ 0.77 | ▲ 0.70 |
| Coke | 1,979.00 | ▲ 0.35 | ▼ -0.71 |
| Coking Coal | 1,362.50 | ▲ 1.19 | ▼ -1.06 |