Iron ore futures extended gains on Wednesday, buoyed by hopes of stimulus measures for the troubled property sector. However, demand concerns persist due to high portside inventory and a seasonal slowdown in steel demand.
According to analysts, near-term demand for iron ore is firm due to increased buying activity in the spot market. Iron ore futures also received support from Beijing’s latest measure to ease home-buying requirements, aiming to bolster the property market, joining other major cities in supporting the real-estate sector.
The market is also hopeful that China will announce new domestic consumption stimulus measures that could support the steel sector. The Chinese Communist Party’s central committee is set to gather in July for a key meeting known as a plenum.
Despite these positive factors, weak steel demand continues to weigh on market sentiment. The decline in the latest production data has also fueled demand concerns. According to the latest China Iron and Steel Association (CISA) data, steel output from major producers has declined. Daily crude steel output among member steelmakers dropped 2.81pct from the previous 10-day period to about 2.19 mln tons between June 11 and June 20.
On the Dalian Commodity Exchange, iron ore futures for September delivery ended daytime trading with a gain of 3.38pct to 826 yuan (USD 113.7) per ton. Dalian coke and coking coal futures also increased by 3.31pct and 2.83pct, respectively, to 2,277 yuan (USD 313) per ton and 1,581 yuan (USD 218) per ton.
On the Shanghai Futures Exchange, rebar futures rose by 0.85pct to 3,563 yuan (USD 490) per ton, while HRC futures increased by 0.62pct to 3,753 yuan (USD 517) per ton. Wire rod futures increased by 0.8pct to 3,765 yuan (USD 518) per ton, and stainless steel futures grew by 0.72pct to 13,960 yuan (USD 1,922) per ton.
1 USD / 7.26 yuan
| Material | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
| Wire Rod | 3,765 | 0.80 | 0.64 |
| HRC | 3,753 | 0.62 | 0.85 |
| Rebar | 3,563 | 0.85 | 0.87 |
| Stainless Steel | 13,960 | 0.72 | 0.29 |
| Iron Ore | 826 | 3.38 | 3.03 |
| Coke | 2,277 | 3.31 | 2.99 |
| Coking Coal | 1,581 | 2.83 | 2.18 |
