Iron ore declines on weak steel demand

Iron ore futures fell on Wednesday as weak steel market fundamentals continued to weigh on market sentiment.

Demand for finished steel remained subdued, with prices coming under pressure amid ample supply and seasonally weak consumption. Market sources said shrinking steel mills’ margins, coupled with high coke prices, could prompt Chinese mills to reduce production in the coming weeks, weighing on iron ore demand.

Unlike last year, when record Chinese steel exports partly offset sluggish domestic consumption, export prospects have become increasingly challenging in 2026 due to rising protectionist measures. The recent changes to the EU’s steel import regime are expected to add further pressure after the bloc reduced its annual tariff-free steel import quotas by 47pct and raised the out-of-quota tariff to 50pct from the previous 25pct.

Meanwhile, high iron ore inventories at Chinese ports remained a key headwind for the market, reinforcing the bearish medium-term outlook.

Reflecting the cautious market sentiment, major Chinese steelmaker Shagang kept domestic long steel prices unchanged for early July sales.

On the Dalian Commodity Exchange, the most-traded September iron ore contract fell 1.68pct to 733 yuan (USD 107.9) per ton. Coking coal and coke futures declined 1.06pct and 2.38pct to 1,262 yuan (USD 186) per ton and 1,909 yuan (USD 281) per ton, respectively.

On the Shanghai Futures Exchange, rebar futures dropped 0.55pct to 3,067 yuan (USD 451) per ton, while HRC futures fell 0.79pct to 3,285 yuan (USD 484) per ton. Wire rod futures eased 0.30pct to 3,358 yuan (USD 494) per ton, while stainless steel futures edged up to 14,615 yuan (USD 2,152) per ton.

1 USD / 6.79 yuan