Dalian iron ore futures extended gains on Tuesday, driven by hopes for improving steel demand, though concerns about long-term demand remain.
Analysts noted a decline in steel inventories at major Chinese warehouses, signaling improved demand as weather conditions are expected to improve. However, the long-term outlook for iron ore demand is bearish, with high port-side inventories and loss-making steel operations likely to curtail output this year.
Citi, which had already downgraded its near-term iron ore forecasts in June, further reduced its projections, lowering its forecast from USD 95 per ton to USD 85 for 2024 and revising its 2025 price forecast from USD 100 per ton to USD 95 per ton due to deteriorating fundamentals. According to Citi analysts, China is transitioning to a new economic model that requires less steel, leading to output rationalization by steel mills, which will affect iron ore consumption and prices.
On the Dalian Commodity Exchange, the most-traded iron ore futures contract rose by 1.21pct to 710.5 yuan (USD 99.5) per ton. Coke futures increased by 2.42pct to 1,862.5 yuan (USD 261) per ton, while coking coal futures fell by 0.3pct to 1,327 yuan (USD 186) per ton.
On the Shanghai Futures Exchange, rebar futures gained 1.93pct to 3,172 yuan (USD 444) per ton, HRC futures rose by 1.97pct to 3,217 yuan (USD 451) per ton, and wire rod futures increased by 1.21pct to 3,176 yuan (USD 445) per ton. Stainless steel futures, however, decreased by 0.4pct to 13,655 yuan (USD 1,913) per ton.
1 USD / 7.13 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,176 |
1.21 |
0.22 |
| HRC | 3,217 |
1.97 |
1.27 |
| Rebar | 3,172 |
1.93 |
0.50 |
| Stainless Steel | 13,655 |
-0.40 |
-0.59 |
| Iron Ore | 710.5 |
1.21 |
-0.21 |
| Coke | 1,862.5 |
2.42 |
1.07 |
| Coking Coal | 1,327 |
-0.30 |
-1.47 |
