Iron ore futures declined on Thursday as falling oil prices after the memorandum of understanding between the United States and Iran, coupled with concerns over weakening Chinese steel demand, weighed on market sentiment.
Iron ore futures came under further pressure after the agreement raised expectations of lower energy and freight costs following the planned reopening of the Strait of Hormuz and the easing of disruptions to global shipping routes. Brent oil prices struck a three-month low, reinforcing expectations of lower transportation and energy costs.
Market sentiment was also pressured by expectations that Chinese steel production may be nearing its seasonal peak. Tightening steel mill margins and sluggish demand from the construction sector are expected to encourage some producers to bring forward maintenance schedules and curb output, reducing demand for steelmaking raw materials.
The decline in iron ore prices was further amplified by sharp losses in coking coal and coke futures. Market insiders noted that concerns over supply disruptions following a major coal mine accident in China’s Shanxi province last month have eased as affected mines gradually resume operations. At the same time, weak steel demand and deteriorating mill profitability continue to weigh on raw material consumption.
High port-side iron ore inventories in China and rising global iron ore shipments also remain key headwinds for the market, adding to concerns over oversupply.
On the Dalian Commodity Exchange, the most-traded September iron ore contract fell 1.3pct to 747 yuan (USD 110.3) per ton. Coking coal and coke futures declined by 5.78pct and 3pct to 1,271 yuan (USD 188) per ton and 2,019.5 yuan (USD 298) per ton, respectively.
On the Shanghai Futures Exchange, rebar futures fell 0.95pct to 3,131 yuan (USD 463) per ton, while HRC futures declined 0.77pct to 3,349 yuan (USD 495) per ton. Wire rod futures edged up 0.27pct to 3,374 yuan (USD 499) per ton, while stainless steel futures increased to 15,170 yuan (USD 2,242) 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 | 3,374.00 | ▲ 0.27 | ▲ 0.59 |
| Hot Rolled Coils | 3,349.00 | ▼ -0.77 | ▼ -0.66 |
| Rebar | 3,131.00 | ▼ -0.95 | ▼ -0.77 |
| Stainless Steel | 15,170.00 | ▲ 0.07 | ▲ 0.13 |
| Iron ore | 747.00 | ▼ -1.13 | ▼ -0.07 |
| Coke | 2,019.50 | ▼ -3.00 | ▼ -2.65 |
| Coking Coal | 1,271.00 | ▼ -5.78 | ▼ -5.63 |