Iron ore futures rose on Thursday after reports that China Mineral Resources Group (CMRG) had instructed some steel mills to stop purchasing certain low-grade Fortescue iron ore fines from Chinese ports starting July 15, providing near-term support to prices.
According to Reuters, the restrictions apply to selected Fortescue brands representing around 5pct of China’s portside iron ore inventories.
Despite the rebound, the medium-term outlook remained weak as seasonal softness in Chinese steel demand continued to weigh on the market. Market insiders said finished steel inventories at major warehouses have continued to increase amid sluggish domestic downstream buying activity and slower export demand, putting further pressure on steel mills’ margins.
Analysts also noted that high iron ore inventories at Chinese ports, ample seaborne supply from major producers and rising protectionist measures on Chinese steel exports are expected to continue limiting iron ore demand in the coming months.
On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 0.48pct to 740 yuan (USD 108.9) per ton. Coking coal futures edged up to 1,267.5 yuan (USD 187) per ton, while coke futures declined 0.96pct to 1,905 yuan (USD 281) per ton.
On the Shanghai Futures Exchange, rebar futures fell 0.20pct to 3,067 yuan (USD 452) per ton, while HRC futures declined 0.33pct to 3,283 yuan (USD 483) per ton. Wire rod futures gained 0.24pct to 3,367 yuan (USD 496) per ton, while stainless steel futures dropped 0.72pct to 14,575 yuan (USD 2,146) 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 | 3,367.00 | ▲ 0.24 | ▲ 0.27 |
| Hot Rolled Coils | 3,283.00 | ▼ -0.33 | ▼ -0.06 |
| Rebar | 3,067.00 | ▼ -0.20 | 0.00 |
| Stainless Steel | 14,575.00 | ▼ -0.72 | ▼ -0.27 |
| Iron ore | 740.00 | ▲ 0.48 | ▲ 0.95 |
| Coke | 1,905.00 | ▼ -0.96 | ▼ -0.21 |
| Coking Coal | 1,267.50 | ▲ 0.20 | ▲ 0.43 |