Iron ore futures rallied on Thursday, driven by optimism that Beijing may roll out policy measures to stabilize its industrial sector.
Investors responded positively to signals from Beijing, where top officials pledged to crack down on aggressive price-cutting practices and address persistent overcapacity in heavy industries. The announcements come amid mounting concerns over deflation, prompting calls from both the government and state media for tighter regulation to rein in damaging price wars and safeguard corporate margins.
At a high-level economic meeting chaired by President Xi Jinping, officials emphasized plans to phase out outdated industrial capacity, a move that may once again shine a spotlight on China’s oversupplied steel sector. Although the National Development and Reform Commission (NDRC) reiterated its commitment earlier this year to reducing excess steel production, concrete steps have yet to be announced. Some regional production cuts have occurred, but these were primarily driven by environmental mandates rather than industry-wide reforms.
While potential steel capacity reductions could support finished steel prices, they would likely weigh on iron ore demand. In the longer term, the outlook for iron ore remains bearish, largely due to persistent weakness in China’s property sector, historically a key driver of steel consumption. Additionally, rising global protectionism targeting Chinese steel exports may further dampen demand for iron ore.
On the Dalian Commodity Exchange, the most-active September iron ore contract rose 2.45pct to 733 yuan (USD 102.2) per ton. Coke and coking coal futures also advanced, up 2.05pct and 3.76pct to 1,445.5 yuan (USD 202) and 856 yuan (USD 119) per ton, respectively.
Meanwhile, on the Shanghai Futures Exchange, rebar and HRC futures climbed 1.45pct to 3,076 yuan (USD 429) per ton and 3,208 yuan (USD 448), respectively. Wire rod inched up 0.27pct to 3,337 yuan (USD 466), while stainless steel gained 0.55pct to settle at 12,710 yuan (USD 1,774) per ton.
1 USD / 7.16 yuan
CHINESE STEEL FUTURES
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Date: 7/03/2025 |
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| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,337 |
0.27 |
0 |
| HRC | 3,208 |
1.45 |
0.53 |
| Rebar | 3,076 |
1.45 |
0.36 |
| Stainless Steel | 12,710 |
0.55 |
0.31 |
| Iron Ore | 733 |
2.45 |
1.43 |
| Coke | 1,445.5 |
2.05 |
0.24 |
| Coking Coal | 856 |
3.76 |
1.46 |
