Iron ore futures ease as steel output curbs cloud demand outlook

Iron ore futures edged lower on Friday as fresh steel production curbs in Tangshan weighed on the demand outlook, while hopes for fresh policy support ahead of next week’s Politburo meeting were tempered by doubts over its impact on steel demand.

Market insiders said a new round of environmental protection measures in Tangshan is expected to reduce steel production, limiting mills’ appetite for iron ore purchases. Several steelmakers have reportedly cut production or idled blast furnaces as weak margins and sluggish finished steel demand continue to pressure operations.

Fundamentally, inventories of imported iron ore at major Chinese ports continued to decline modestly, although the pace of destocking slowed as daily port pick-up volumes weakened, reflecting softer raw material consumption.

Investors are also looking ahead to next week’s meeting of China’s Politburo for signals on economic policy in the second half of the year.

Chinese traders said the domestic steel market remained largely unchanged, with mills keeping prices steady despite limited trading activity. Export business also remained slow, while higher freight costs linked to geopolitical tensions in the Middle East continued to complicate new export deals.

On the Dalian Commodity Exchange, the most-traded September iron ore contract fell 0.13pct to 746 yuan (USD 110.1) per ton. Coking coal futures rose 0.23pct to 1,285 yuan (USD 190) per ton, while coke futures were unchanged at 1,840.5 yuan (USD 272) per ton.

On the Shanghai Futures Exchange, rebar futures declined 0.45pct to 3,076 yuan (USD 454) per ton. HRC futures eased 0.12pct to 3,289 yuan (USD 486) per ton, while wire rod futures fell 0.39pct to 3,294 yuan (USD 486) per ton. Stainless steel futures slipped 0.37pct to 14,770 yuan (USD 2,181) per ton.

1 USD / 6.77 yuan