Iron ore futures inch lower as mixed fundamentals limit market direction

Iron ore futures edged lower on Tuesday as the market struggled to find clear direction, with lower global shipments offset by subdued steel demand and cautious sentiment ahead of potential policy support from Beijing.

Market insiders said iron ore fundamentals remained largely stable, while downstream demand entered a seasonal plateau. Weak steel consumption and squeezed mill margins continued to limit raw material purchases, with several mills undertaking maintenance or production cuts to reduce losses.

On the supply side, iron ore shipments from Australia and Brazil declined on a weekly basis, although supply remained generally adequate.

Analysts said the market remains in a rollover period for the most-traded futures contract, while the absence of major policy announcements has reinforced a wait-and-see approach. Investors continue to monitor China’s upcoming Politburo meeting for signs of additional economic support, although expectations for broad-based stimulus remain limited.

Chinese traders said domestic steel trading remained subdued due to high temperatures and seasonal demand weakness. Social inventories edged higher, while billet prices softened. Export activity also remained sluggish, with offer prices largely unchanged.

On the Dalian Commodity Exchange, the most-traded September iron ore contract eased 0.2pct to 741 yuan (USD 109.5) per ton. Coking coal futures fell 2.36pct to 1,242.5 yuan (USD 184) per ton, while coke futures declined 1.30pct to 1,825 yuan (USD 270) per ton.

On the Shanghai Futures Exchange, rebar futures slipped 0.65pct to 3,060 yuan (USD 452) per ton, HRC futures fell 0.42pct to 3,281 yuan (USD 485) per ton, and wire rod futures eased 0.39pct to 3,281 yuan (USD 485) per ton. Stainless steel futures dropped 1.36pct to 14,515 yuan (USD 2,145) per ton.

1 USD / 6.76 yuan