Iron ore futures were broadly stable on Friday as near-term supply concerns provided some support, while weak steel demand and squeezed mill margins continued to limit the upside.
Iron ore inventories fell recently on weekly basis, which analysts attributed to near-term boost in purchasing activities due to an expected typhoon which potentially can disrupt the activity, providing some temporary support to prices.
Coke and coking coal spot prices remained firm as strict safety supervision in key coal-producing regions continued to constrain mine output. Losses at coke producers have also prompted production cuts, tightening coke supply and providing cost support to the ferrous complex. Rising raw material costs, however, are putting further pressure on steel mill margins and limiting mills’ willingness to pay higher prices for iron ore.
However, the broader demand picture remained weak. Chinese steel mills continue to face pressure from low finished steel prices and rising raw material costs, with expectations of higher coke prices further squeezing margins. Shagang also cut domestic long steel prices by 50 yuan (USD 7.4) per ton for August 21-31, highlighting continued pressure on the finished steel market.
Chinese steel traders said market conditions remained broadly stable in both domestic and export markets, while export activity for semi-finished steel continued to increase.
On the Dalian Commodity Exchange, the most-traded iron ore contract rose 0.21pct to 707.5 yuan (USD 105.2) per ton. Coke futures increased 2.12pct to 2,119.5 yuan (USD 315) per ton, while coking coal futures saw a marginal pullback of 0.13pct to 1,581.5 yuan (USD 235) per ton.
On the Shanghai Futures Exchange, rebar futures rose 0.46pct to 3,039 yuan (USD 452) per ton, while HRC futures increased 0.18pct to 3,295 yuan (USD 490) per ton. Wire rod futures inched higher to 3,258 yuan (USD 485) per ton, while stainless steel futures fell 1.18pct to 14,200 yuan (USD 2,112) per ton.
1 USD / 6.72 yuan
| Item | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
|---|---|---|---|
| Wire Rod | 3,258.00 | ▲ 0.06 | ▼ -0.09 |
| Hot Rolled Coils | 3,295.00 | ▲ 0.18 | ▲ 0.12 |
| Rebar | 3,039.00 | ▲ 0.46 | ▲ 0.23 |
| Stainless Steel | 14,200.00 | ▼ -1.18 | ▼ -0.70 |
| Iron ore | 707.50 | ▲ 0.21 | ▲ 0.07 |
| Coke | 2,119.50 | ▲ 2.12 | ▲ 2.24 |
| Coking Coal | 1,581.50 | ▼ -0.13 | ▼ -0.63 |