Iron ore futures decline on cautious demand outlook

Iron ore futures dipped on Friday as market sentiment remained cautious amid a slight rise in port inventories and escalating trade tensions. While the most-traded iron ore contract posted a weekly gain, driven by higher output from Chinese mills amid firm domestic steel demand, the broader outlook remained uncertain.

Beijing’s plans to cut steel production capacity and the rise of protectionist measures against Chinese steel exports continued to weigh on the market. Additionally, iron ore inventories at major Chinese ports increased slightly this week due to higher shipments from key miners, further pressuring prices. Global sentiment also weakened after the U.S. announced a 25pct tariff on automotive imports, set to take effect on April 3, impacting commodity markets.

Several Chinese steel traders noted that while domestic steel demand has improved, it remains below market expectations, limiting upside potential. Without a further rise in downstream steel demand or government stimulus measures, the market is likely to remain stuck at current levels.

On the Dalian Commodity Exchange (DCE), the most-traded May iron ore contract slipped 0.19pct to 785.5 yuan (USD 108.1) per metric ton but still recorded a 0.77pct gain from last Friday’s morning session close. Coke and coking coal futures also declined, falling 0.8pct and 1.06pct, respectively, to 1,617.5 yuan (USD 223) and 1,024 yuan (USD 141) per ton.

Meanwhile, on the Shanghai Futures Exchange, rebar futures dropped 0.28pct to 3,197 yuan (USD 440) per ton, while HRC futures edged down 0.12pct to 3,374 yuan (USD 465). Wire rod futures slipped 0.26pct to 3,404 yuan (USD 469), while stainless steel futures bucked the trend, rising 0.93pct to 13,535 yuan (USD 1,864) per ton.

1 USD / 7.26 yuan