Iron ore futures gain as pre-holiday restocking supports prices

China’s iron ore futures moved higher on Thursday, supported by pre-holiday restocking by steel mills, although weak mill profitability continued to limit the upside.

Market insiders said mills are booking cargoes ahead of the Golden Week holiday to secure raw material supplies, providing temporary support to iron ore prices. However, the buying momentum is viewed as largely seasonal, with no clear improvement yet in underlying steel demand.

Steel mill margins remain under pressure, prompting some producers to reduce output or schedule maintenance. Expectations of further production controls and efforts to reduce steel inventories are providing some support to the market.

Chinese steel traders said market activity remained relatively subdued, with steel prices moving within a narrow range. Inventories of major carbon steel products continued to decline, although the pace of demand recovery remains uncertain.

On the Dalian Commodity Exchange, the most-traded iron ore contract rose 0.28 pct to 710.5 yuan (USD 105.9) per ton. Coking coal fell 1.65 pct to 1,580 yuan (USD 236), while coke declined 0.63 pct to 2,043.5 yuan (USD 305) per ton.

On the Shanghai Futures Exchange, rebar declined 0.13 pct to 3,122 yuan (USD 465) per ton while HRC fell 0.12 pct to 3,317 yuan (USD 495) per ton. Wire rod futures increased 0.2 pct to 3,438 yuan (USD 513) per ton, while stainless steel rose 1 pct to 13,595 yuan (USD 2,027) per ton.

1 USD / 6.7 yuan