Iron ore futures declined on Friday, weighed down by softening steel demand and cautious market sentiment.
The seasonal slowdown in steel consumption, typical during the summer months, has led to a slower pace of inventory destocking at major Chinese steel warehouses. This trend raises concerns about a potential oversupply of steel, as production remains high. An oversupply scenario could drive prices lower and further erode the profitability of Chinese steel mills.
The outlook for iron ore is also under pressure due to the lack of major economic stimulus from Beijing and ongoing difficulties in the property sector, which is traditionally a key driver of steel demand.
However, in the near term, iron ore demand has shown some resilience. Inventory levels at major Chinese ports remain relatively firm, providing a degree of support and helping to limit the downside risk in prices.
On the Dalian Commodity Exchange, the most-traded September iron ore contract closed 1.24 pct lower at 718 yuan (USD 99.6) per metric ton, a 1.37 pct drop from the close of the morning session on the previous Friday. Coke and coking coal futures also retreated, with coke falling 1.81 pct to 1,383 yuan (USD 192) per ton, and coking coal slipping 4 pct to 801.5 yuan (USD 111) per ton.
On the Shanghai Futures Exchange, rebar futures dropped 0.42 pct to 3,046 yuan (USD 423) per ton, while HRC futures also declined 0.42 pct to 3,189 yuan (USD 443) per ton. Wire rod futures edged down to 3,334 yuan (USD 463) per ton, and stainless steel futures remained mostly unchanged at 12,875 yuan (USD 1,787) per ton.
1 USD / 7.2 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,334 |
-0.51 |
-0.15 |
| HRC | 3,189 |
-0.75 |
-0.66 |
| Rebar | 3,046 |
-0.42 |
-0.49 |
| Stainless Steel | 12,875 |
-0.04 |
-0.04 |
| Iron Ore | 718 |
-1.24 |
-1.25 |
| Coke | 1,383 |
-1.81 |
-1.70 |
| Coking Coal | 801.5 |
-4.01 |
-3.24 |