Iron ore futures extend losses on weak market fundamentals

Iron ore futures fell on Wednesday as weak steel demand and continued pressure across China’s steel market weighed on prices.

Iron ore fundamentals remain bearish, with high port inventories and rising supply from global miners continuing to pressure the market. Market participants also point to pressure on steel production as mills contend with thin profit margins.

Chinese steel traders said domestic consumption remains sluggish, while export offers have remained broadly stable and leading mills have kept their base prices unchanged. Although Chinese steel exports exceeded 10 mln tons in September, cumulative shipments fell 2.6pct YoY to 85.64 mln tons during January-September.

Macroeconomic data showed that China’s producer price index rose 5pct YoY in September, accelerating from 3.8pct in August and marking the fastest increase since June 2022. The consumer price index increased 0.9pct, compared with 0.8pct in August. The figures indicate rising factory-gate cost pressures, while weak consumer demand continues to constrain the broader recovery.

On the Dalian Commodity Exchange, the most-traded iron ore contract fell 0.81pct to 674 yuan (USD 100.6) per ton. Coking coal declined 1.54pct to 1,536.5 yuan (USD 230) per ton, while coke dropped 1.60pct to 2,000 yuan (USD 299) per ton.

On the Shanghai Futures Exchange, rebar fell 0.39pct to 3,073 yuan (USD 459) per ton. HRC declined 0.52pct to 3,237 yuan (USD 483) per ton, while wire rod slipped to 3,414 yuan (USD 510) per ton. Stainless steel rose 0.19pct to 13,470 yuan (USD 2,012) per ton.

1 USD / 6.69 yuan