Iron ore futures slipped on Friday as Beijing’s pledge to cut excess steel capacity and mounting trade barriers on Chinese steel products dampened market sentiment.
According to Bloomberg, China’s steel industry plans to introduce a compensation scheme for shutting down outdated and inefficient facilities as part of government efforts to curb steel production, said Qian Gang, Chairman of Citic Pacific Special Steel Group. Earlier this month, the National Development and Reform Commission (NDRC) proposed production curbs to address overcapacity, though the exact scale remains uncertain. Estimates range from 15-20 mln tons to as much as 50 mln tons.
The iron ore market is already under pressure from rising protectionist measures following U.S. tariffs on steel and aluminum imports. Several countries have imposed duties on Chinese steel products, and ongoing investigations could further impact exports this year.
However, firm domestic steel demand and rising output have helped limit losses. Market participants also anticipate stimulus measures from Beijing to support economic growth, which could benefit the steel sector.
On the Dalian Commodity Exchange, the most-traded May iron ore contract fell 0.33pct to 757.5 yuan (USD 104.6) per ton, posting a weekly decline of 3.8pct and a 4.6pct drop from last Friday’s morning session. Coke and coking coal futures dropped 1.76pct and 1.8pct, settling at 1,536 yuan (USD 212) and 1,010 yuan (USD 140) per ton, respectively.
On the Shanghai Futures Exchange, rebar and HRC prices remained mostly unchanged, closing at 3,156 yuan (USD 436) per ton and 3,351 yuan (USD 463) per ton, respectively. Wire rod futures fell 0.38pct to 3,389 yuan (USD 468) per ton, while stainless steel futures declined 0.6pct to 13,350 yuan (USD 1,844) per ton.
1 USD / 7.23 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,389 |
-0.38 |
0.15 |
| HRC | 3,351 |
0.06 |
0.09 |
| Rebar | 3,156 |
-0.03 |
-0.19 |
| Stainless Steel | 13,350 |
-0.60 |
-1.09 |
| Iron Ore | 757.5 |
-0.33 |
-0.33 |
| Coke | 1,536 |
-1.76 |
-1.76 |
| Coking Coal | 1,010 |
-1.80 |
-1.58 |