Iron ore futures rebounded on Tuesday, supported mainly by a sharp rally in coking coal and coke prices, while near-term supply concerns provided additional support. However, persistent oversupply and weak steel demand continued to weigh on the longer-term outlook.
Market sentiment across the ferrous complex strengthened as coking coal futures surged, reflecting expectations of tighter mine supply and providing cost support to steelmaking raw materials. The gains in coal and coke spilled over into iron ore futures and supported broader steel market sentiment.
Higher oil prices, driven by persistent Middle East tensions, also added to cost support for iron ore, with Brent crude rising above USD 89 per barrel.
Near-term sentiment also received some support from ongoing labor action at BHP’s Port Hedland export hub. However, these factors are not sufficient to alter the broader supply-demand picture as iron ore continued to face relatively weak fundamentals due to high port-side inventories and rising global supply.
Chinese steel traders said market activity remained relatively quiet due to the summer slowdown, although buying sentiment improved slightly. Baosteel’s recent increase in September flat steel prices also provided some support, while export offers remained largely stable.
On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 1.26pct to 721.5 yuan (USD 107.0) per ton. Coking coal futures jumped 5.41pct to 1,343.5 yuan (USD 199.3) per ton, while coke futures increased 2pct to 1,910 yuan (USD 283.4) per ton.
On the Shanghai Futures Exchange, wire rod futures increased 0.98pct to 3,285 yuan (USD 487.4) per ton, HRC futures rose 0.22pct to 3,244 yuan (USD 481.3) per ton and rebar futures gained 0.47pct to 3,016 yuan (USD 447.2) per ton. Stainless steel futures declined 0.65pct to 14,525 yuan (USD 2,155.3) per ton.
1 USD / 6.74 yuan
| Item | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
|---|---|---|---|
| Wire Rod | 3,285.00 | ▲ 0.98 | ▲ 1.13 |
| Hot Rolled Coils | 3,244.00 | ▲ 0.22 | ▲ 0.28 |
| Rebar | 3,016.00 | ▲ 0.47 | ▲ 0.63 |
| Stainless Steel | 14,525.00 | ▼ -0.65 | ▼ -0.62 |
| Iron ore | 721.50 | ▲ 1.26 | ▲ 1.11 |
| Coke | 1,910.00 | ▲ 2.00 | ▲ 2.36 |
| Coking Coal | 1,343.50 | ▲ 5.41 | ▲ 5.21 |