Iron ore futures edged higher on Thursday, supported by concerns over a potential supply disruption at BHP’s Port Hedland operations in Western Australia, although weakening steel demand continued to limit price gains.
Workers at the world’s largest iron ore export terminal are scheduled to stage an eight-hour strike on 16 July after enterprise agreement negotiations between BHP and the Combined Ports Unions failed to reach a settlement. However, analysts said the market remains well supplied, with elevated iron ore inventories at Chinese ports expected to cushion any short-term disruption.
Market fundamentals remained weak as falling steel mill profitability continued to weigh on raw material demand. According to the China Iron and Steel Association (CISA), average daily crude steel output at member mills declined 3.6pct in the last ten days of June compared with mid-June, while production was 4.9pct lower than a year earlier.
Steel demand also remained under pressure as severe weather disrupted construction activity across southern and central China. Some Chinese steel traders highlighted that export sales continued to slow, while renewed tensions in the Middle East have increased freight costs, adding further pressure on steel trade.
On the macroeconomic front, China’s producer price inflation accelerated to its highest level in four years during June, reflecting higher energy costs. However, analysts noted that weak domestic consumption, sluggish investment and the prolonged property downturn continue to weigh on industrial demand.
On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 0.27pct to 745.5 yuan (USD 109.6) per ton. Coking coal and coke futures were little changed at 1,290 yuan (USD 190) per ton and 1,945 yuan (USD 286) per ton, respectively.
On the Shanghai Futures Exchange, rebar futures edged up to 3,091 yuan (USD 455) per ton, while HRC futures gained 0.12pct to 3,298 yuan (USD 485) per ton. Wire rod futures fell 0.51pct to 3,338 yuan (USD 491) per ton, while stainless steel futures declined 1.34pct to 14,390 yuan (USD 2,117) 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 | 3,338.00 | ▼ -0.51 | ▼ -0.33 |
| Hot Rolled Coils | 3,298.00 | ▲ 0.12 | ▼ -0.06 |
| Rebar | 3,091.00 | ▲ 0.10 | ▼ -0.16 |
| Stainless Steel | 14,390.00 | ▼ -1.34 | ▼ -0.42 |
| Iron ore | 745.50 | ▲ 0.27 | ▼ -0.07 |
| Coke | 1,945.00 | ▼ -0.08 | ▼ -0.59 |
| Coking Coal | 1,290.00 | ▲ 0.08 | ▼ -0.27 |