Iron ore futures declined on Friday as concerns over weakening steel demand and pressure on Chinese steel mill margins continued to weigh on market sentiment.
Higher coking coal prices and the seasonal slowdown in steel consumption have squeezed mill profitability, prompting some producers to reduce output. According to the China Iron and Steel Association (CISA), daily crude steel production by its member mills in late May fell 4.6pct compared with mid-May and was down 4.1pct YoY.
Chinese steel traders said domestic spot market conditions remained largely unchanged, with slowing demand and a lack of positive market drivers continuing to pressure finished steel prices. While flat steel demand remained relatively stable during the week, long steel demand weakened amid slower construction activity typically seen during the summer season.
On the Dalian Commodity Exchange, the most-traded September iron ore contract fell 0.91pct to 766 yuan (USD 113.1) per ton, down 2.2pct compared with the close of last Friday’s morning session.
Coking coal and coke futures continued to gain, rising 2.6pct and 0.22pct to 1,459 yuan (USD 215) per ton and 2,041.5 yuan (USD 301) per ton, respectively.
On the Shanghai Futures Exchange, rebar futures edged lower to 3,165 yuan (USD 467) per ton, while HRC futures slipped 0.15pct to 3,381 yuan (USD 499) per ton. Wire rod futures rose 0.45pct to 3,367 yuan (USD 497) per ton, while stainless steel futures fell 1.22pct to 14,610 yuan (USD 2,157) per ton.
1 USD / 6.77 yuan
| Item | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
|---|---|---|---|
| Wire Rod | 3,367.00 | ▲ 0.45 | ▲ 0.56 |
| Hot Rolled Coils | 3,381.00 | ▼ -0.15 | ▲ 0.12 |
| Rebar | 3,165.00 | ▼ -0.03 | ▲ 0.25 |
| Stainless Steel | 14,610.00 | ▼ -1.22 | ▼ -0.68 |
| Iron ore | 766.00 | ▼ -0.91 | ▼ -0.20 |
| Coke | 2,041.50 | ▲ 0.22 | ▼ -0.07 |
| Coking Coal | 1,459.00 | ▲ 2.60 | ▲ 1.88 |
