Iron ore gains on restocking hopes and cost support

China’s iron ore futures rose on Tuesday, extending the previous day’s gains, as expectations of pre-holiday restocking and firmer sentiment across the steel market continued to support prices.

Analysts said steel mills are becoming more active in purchasing raw materials ahead of China’s October National Day holiday. Expectations for the September-October peak season, along with improved trading sentiment in the domestic steel market, have strengthened buying interest.

Cost pressures are also supporting the iron ore market due to tight shipping capacity and higher freight costs.

However, key headwinds remain, with high iron ore inventories at Chinese ports and pressure on steel mill profitability continuing to limit the upside.

Chinese steel traders said the domestic market was firmer, with better rebar trading and improved buying interest. Export sentiment also remained positive, while low offers were becoming less available as traders faced higher costs and logistics uncertainty.

On the Dalian Commodity Exchange, the most-traded iron ore contract rose 1.36pct to 744.5 yuan (USD 110.9) per ton. Coking coal futures increased 2.74pct to 1,689.5 yuan (USD 252) per ton, while coke futures gained 1.81pct to 2,191.5 yuan (USD 327) per ton.

On the Shanghai Futures Exchange, HRC futures rose 0.62pct to 3,395 yuan (USD 506) per ton, while rebar futures increased 0.60pct to 3,177 yuan (USD 473) per ton. Wire rod futures gained 0.44pct to 3,423 yuan (USD 510) per ton, while stainless steel futures fell 0.36pct to 13,830 yuan (USD 2,061) per ton.

1 USD / 6.71 yuan