Iron ore futures recovered on Friday, supported by stronger coking coal prices and improving sentiment in the Chinese steel market. Signs of better downstream activity ahead of September also provided some support, although high port-side iron ore inventories continued to limit the upside.
Chinese steel traders said finished steel inventories have started to decline as the market approaches September, while sales volumes have improved in some regions. Prices in domestic sales channels also increased, indicating a modest improvement in market activity. Expectations for September demand have improved, with recent price increases by major steel mills further supporting sentiment. However, market participants remain cautious as overall conditions are still mixed.
The improvement in steel activity is providing some support to iron ore consumption. CISA data showed average daily crude steel output among member mills rose 5.8pct from late July to 1.97 mln tons per day during August 1-10.
Coking coal remained the dominant source of cost support for the ferrous complex. Prices strengthened sharply amid supply concerns following a new mine accident, while tighter supply and security-related disruptions continued to support the raw material.
Despite the improving steel market tone, elevated iron ore inventories continued to limit the upside.
On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 0.42pct to 710.5 yuan (USD 105.4) per ton. However, the contract was down 0.84pct from the close of last Friday’s morning session.
Coking coal futures jumped 4.05pct to 1,374 yuan (USD 204) per ton, while coke futures increased 0.90pct to 1,911.5 yuan (USD 284) per ton.
On the Shanghai Futures Exchange, rebar futures increased 0.40pct to 3,015 yuan (USD 447) per ton. HRC futures rose 0.77pct to 3,260 yuan (USD 484) per ton. Wire rod futures declined 0.49pct to 3,259 yuan (USD 484) per ton, while stainless steel futures fell 2.22pct to 14,115 yuan (USD 2,094) 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 | 3,259.00 | ▼ -0.49 | ▼ -0.49 |
| Hot Rolled Coils | 3,260.00 | ▲ 0.77 | ▲ 0.83 |
| Rebar | 3,015.00 | ▲ 0.40 | ▲ 0.43 |
| Stainless Steel | 14,115.00 | ▼ -2.22 | ▼ -1.91 |
| Iron ore | 710.50 | ▲ 0.42 | ▲ 0.77 |
| Coke | 1,911.50 | ▲ 0.90 | ▲ 1.10 |
| Coking Coal | 1,374.00 | ▲ 4.05 | ▲ 3.89 |