Iron ore futures extended gains on Wednesday despite mixed steel market signals, while weak steel demand and slowing economic growth continued to cloud the medium-term outlook.
China’s crude steel production increased 0.4pct YoY to 83.67 mln tons in June, according to data from the National Bureau of Statistics (NBS). Steel output during the first half of the year declined 3pct to 499.95 mln tons, with the pace of decline narrowing from 3.9pct in the January-May period.
Despite the June production increase, analysts said underlying market fundamentals remain weak. Industry surveys showed blast furnace operating rates and hot metal output continued to edge lower this week, indicating iron ore demand remains under pressure despite the modest recovery in June steel output.
The broader ferrous complex was also supported by higher raw material costs. Coking coal prices rose after mine safety inspections and weather-related transport disruptions tightened domestic supply, while concerns over potential disruptions to Australian iron ore exports and restrictions on deliveries of certain lower-grade Fortescue cargoes in China provided additional support to iron ore prices.
China’s economy expanded 4.3pct YoY in the second quarter, below market expectations, highlighting persistent weakness in domestic demand despite resilient exports and industrial production.
On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 1.13pct to 762 yuan (USD 112.5) per ton. Coking coal futures gained 1.96pct to 1,273 yuan (USD 188) per ton, while coke futures increased 0.72pct to 1,879.5 yuan (USD 278) per ton.
On the Shanghai Futures Exchange, rebar futures rose 1.33pct to 3,115 yuan (USD 460) per ton, HRC futures increased 1.12pct to 3,327 yuan (USD 491) per ton. Wire rod futures gained 1.94pct to 3,355 yuan (USD 495) per ton, while stainless steel futures edged up 0.38pct to 14,595 yuan (USD 2,156) 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 | 3,355.00 | ▲ 1.94 | ▲ 1.07 |
| Hot Rolled Coils | 3,327.00 | ▲ 1.12 | ▲ 0.75 |
| Rebar | 3,115.00 | ▲ 1.33 | ▲ 0.80 |
| Stainless Steel | 14,595.00 | ▲ 0.38 | ▲ 0.27 |
| Iron ore | 762.00 | ▲ 1.13 | ▲ 0.20 |
| Coke | 1,879.50 | ▲ 0.72 | ▲ 0.61 |
| Coking Coal | 1,273.00 | ▲ 1.96 | ▲ 1.02 |