Iron ore futures fall as steel demand recovery remains uncertain

China’s iron ore futures fell on Friday as uncertainty over a recovery in steel demand continued to weigh on market sentiment.

Market insiders said Chinese steel demand remains weak, with expectations for the September-October peak season yet to translate into a clear improvement. Although steel mills are expected to replenish some iron ore inventories ahead of the Mid-Autumn Festival and National Day holidays, the extent of restocking remains uncertain.

Chinese steel traders described the market as weaker, with domestic steel demand showing limited improvement, while mills are maintaining a relatively firm stance despite weak demand. Major steel producer Shagang has raised its domestic long steel prices by 50-150 yuan per ton for sales during September 11-20, compared with the first ten days of the month, indicating continued efforts by mills to support finished-steel prices.

Meanwhile, steel production has pulled back again as some blast-furnace mills reduce output. Market participants said the combination of weak steel demand and expectations for further production cuts is limiting near-term demand for iron ore, while ample global shipments continue to weigh on the supply-demand balance.

On the Dalian Commodity Exchange, the most-traded iron ore contract fell 1.78pct to 718 yuan (USD 107) per ton. Coking coal futures declined 3.44pct to 1,585 yuan (USD 236) per ton, while coke futures fell 3.10pct to 2,062.5 yuan (USD 307) per ton.

On the Shanghai Futures Exchange, HRC futures fell 1.16pct to 3,325 yuan (USD 496) per ton, while rebar futures declined 1.24pct to 3,108 yuan (USD 463) per ton. Wire rod futures fell 0.18pct to 3,397 yuan (USD 506) per ton, while stainless steel futures declined 1.77pct to 13,580 yuan (USD 2,025) per ton.

1 USD / 6.7 yuan