Iron ore futures retreated on Friday as concerns over weakening steel demand weighed on sentiment.
Despite strong margins keeping Chinese steel mills running at high output levels, demand has softened in recent weeks due to heavy rains and hot weather, raising fears of excess supply. Analysts warn that mills may eventually cut production if margins deteriorate.
The market also faces short-term pressure from production curbs in Tangshan, where authorities ordered mills to cut sintering output between August 25 and September 3 ahead of a military parade in Beijing. However, analysts expect little impact on iron ore consumption.
Rising protectionist measures against Chinese steel exports are adding further uncertainty. Strong exports, particularly of semi-finished products, have so far offset weak domestic demand. At the same time, restrictions on non-VAT steel exports are tightening. Several Chinese traders report that Customs recently blocked around 200,000 tons of alleged non-VAT HRC shipments. From October, new VAT rules will require exporters to pay the same taxes as in the domestic market and verify registration before customs clearance.
For the week, iron ore futures slipped 0.97pct. On the Dalian Commodity Exchange, the most-traded January contract fell 0.71pct to 770 yuan (USD 107.2) per ton, down 0.26pct from last Friday’s close. Coking coal edged down 0.17pct to 1,162 yuan (USD 162), while coke dipped 0.03pct to 1,678.5 yuan (USD 234) per ton.
On the Shanghai Futures Exchange, rebar dropped 0.35pct to 3,119 yuan (USD 435), HRC declined 0.86pct to 3,361 yuan (USD 468), wire rod rose 0.24pct to 3,372 yuan (USD 470), and stainless steel slipped 0.51pct to 12,750 yuan (USD 1,776) a ton.
1 USD / 7.17 yuan
CHINESE STEEL FUTURES
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Date: 8/22/2025 |
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| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,372 |
0.24 |
0.50 |
| HRC | 3,361 |
-0.86 |
-0.42 |
| Rebar | 3,119 |
-0.35 |
-0.06 |
| Stainless Steel | 12,750 |
-0.51 |
-0.35 |
| Iron Ore | 770 |
-0.71 |
-0.32 |
| Coke | 1,678.5 |
-0.03 |
0.86 |
| Coking Coal | 1,162 |
-0.17 |
1.29 |
