Iron ore futures drifted lower on Monday as sluggish downstream steel demand continued to weigh on sentiment, while investors awaited policy signals from China’s Politburo meeting later this week.
Market insiders said construction activity remained constrained by heavy rainfall in parts of southern China and persistent heatwaves in northern regions, limiting seasonal steel demand. Narrow steel mill margins also kept blast furnace utilization under pressure, prompting producers to maintain a cautious approach toward raw material purchases.
Latest data from the China Iron and Steel Association (CISA) showed crude steel output among its member mills remained broadly stable in mid-July but continued to run below year-earlier levels, reflecting subdued production activity.
On the supply side, iron ore arrivals at Chinese ports increased following the unloading of vessels previously delayed by typhoons, while global shipments remained adequate. Although port inventories continued to edge lower, the pace of destocking slowed, highlighting weak underlying demand for raw materials.
Investors are awaiting this week’s Politburo meeting for clues on China’s economic policy in the second half of the year. Market participants expect targeted measures to support growth, although expectations for a broad stimulus package remain limited, leaving the outlook for steel demand uncertain.
Chinese traders said the domestic steel market remained largely unchanged, with most mills keeping prices steady and trading confined to a narrow range. Export activity also remained limited. The easing of geopolitical tensions in the Middle East and lower oil prices had little impact on the steel market.
On the Dalian Commodity Exchange, the most-traded September iron ore contract fell 0.27pct to 741 yuan (USD 109.4) per ton. Coking coal futures declined 1.05pct to 1,270.5 yuan (USD 188) per ton, while coke futures rose 0.68pct to 1,853.5 yuan (USD 274) per ton.
On the Shanghai Futures Exchange, rebar futures gained 0.16pct to 3,078 yuan (USD 455) per ton. HRC futures rose 0.34pct to 3,294 yuan (USD 489) per ton, while wire rod futures eased 0.09pct to 3,288 yuan (USD 486) per ton. Stainless steel futures slipped 0.34pct to 14,690 yuan (USD 2,170) 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 | 3,288.00 | ▼ -0.09 | ▼ -0.18 |
| Hot Rolled Coils | 3,294.00 | ▲ 0.34 | ▲ 0.15 |
| Rebar | 3,078.00 | ▲ 0.16 | ▲ 0.06 |
| Stainless Steel | 14,690.00 | ▼ -0.34 | ▼ -0.54 |
| Iron ore | 741.00 | ▼ -0.27 | ▼ -0.67 |
| Coke | 1,853.50 | ▲ 0.68 | ▲ 0.70 |
| Coking Coal | 1,270.50 | ▼ -1.05 | ▼ -1.14 |
