Iron ore futures edged higher on Friday, holding most of their recent recovery as stronger coking coal and coke prices supported the ferrous complex, although weaker Chinese steel production and high port inventories limited further gains.
Latest China Iron and Steel Association (CISA) data showed that average daily crude steel output among its member mills fell 7.5pct from mid-July to 1.86 mln tons per day during July 21-31. Output was also 5.9pct lower YoY, with CISA attributing the decline mainly to maintenance stoppages at some large steelmakers as well as production data adjustments.
The weaker steel production added to concerns over iron ore demand. Market insiders said some blast furnaces remained under maintenance, while mills continued to purchase iron ore largely for immediate production requirements amid weak finished steel demand and compressed margins.
Supply also remained ample, with iron ore inventories at Chinese ports staying elevated. However, sentiment remained supported by reports that state-backed China Mineral Resources Group (CMRG) had instructed some Chinese steel mills to suspend individual supply negotiations with Rio Tinto. The move is seen as part of CMRG’s efforts to strengthen centralized purchasing and China’s bargaining position with major global iron ore suppliers.
A sharp rally in coking coal and coke provided additional support to the broader ferrous market. Coking coal supply remained constrained by safety inspections and low operating rates at some mines, although weak steel mill margins could limit further price increases.
On the Dalian Commodity Exchange, the most-traded September iron ore contract edged 0.35pct higher to 716.5 yuan (USD 106) per ton, almost unchanged from last Friday’s morning close of 716 yuan per ton.
Coking coal futures rose 3.05pct to 1,267.5 yuan (USD 188) per ton, while coke futures gained 2.83pct to 1,868.5 yuan (USD 277) per ton.
On the Shanghai Futures Exchange, HRC futures increased 0.65pct to 3,243 yuan (USD 480) per ton and rebar futures edged 0.07pct higher to 3,008 yuan (USD 446) per ton. Wire rod futures were nearly unchanged at 3,271 yuan (USD 485) per ton, while stainless steel futures rose 1.56pct to 14,665 yuan (USD 2,173) per ton.
1 USD / 6.75 yuan
| Item | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
|---|---|---|---|
| Wire Rod | 3,271.00 | ▲ 0.03 | ▲ 0.03 |
| Hot Rolled Coils | 3,243.00 | ▲ 0.65 | ▲ 0.22 |
| Rebar | 3,008.00 | ▲ 0.07 | ▼ -0.20 |
| Stainless Steel | 14,665.00 | ▲ 1.56 | ▲ 1.98 |
| Iron ore | 716.50 | ▲ 0.35 | ▼ -0.35 |
| Coke | 1,868.50 | ▲ 2.83 | ▲ 1.93 |
| Coking Coal | 1,267.50 | ▲ 3.05 | ▲ 2.52 |