Iron ore futures rose on Thursday, driven by expectations of improving demand in the near future, though concerns about long-term demand persist.
The reduction in finished steel inventory at major Chinese warehouses suggests better demand ahead of the peak consumption period in September, likely prompting steel mills to ramp up production.
However, the long-term outlook for iron ore remains bearish due to high port-side inventories and weak profitability in the steel sector. Analysts are also skeptical about a strong rebound in steel demand, given the challenges in the property sector, a key consumer of steel.
State-affiliated China Metallurgical News described the current rise in iron ore prices as lacking fundamental support, calling the spike irrational. It cited ample supply, weak demand, high inventories, and low mining costs as factors that are likely to pressure the commodity for the rest of 2024.
On the Dalian Commodity Exchange, the most-traded iron ore futures contract increased by 0.53pct to 760 yuan (USD 106.6) per ton. Dalian coke futures edged down by 0.1pct to 1,991 yuan (USD 279), while coking coal futures rose by 0.29pct to 1,387 yuan (USD 195) per ton.
On the Shanghai Futures Exchange, rebar futures were nearly flat at 3,259 yuan (USD 457) per ton, while HRC futures fell by 0.6pct to 3,311 yuan (USD 464) per ton. Wire rod futures dropped by 2.05pct to 3,196 yuan (USD 448) per ton, while stainless steel futures remained unchanged at 13,865 yuan (USD 1,945) per ton.
1 USD / 7.12 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,196 |
-2.05 |
-2.32 |
| HRC | 3,311 |
-0.60 |
-0.30 |
| Rebar | 3,259 |
-0.09 |
-0.15 |
| Stainless Steel | 13,865 |
0 |
0.14 |
| Iron Ore | 760 |
0.53 |
0.72 |
| Coke | 1,991 |
-0.10 |
0.13 |
| Coking Coal | 1,387 |
0.29 |
0.36 |
