Iron ore futures edged lower on Friday as market sentiment was weighed down by a weakening demand outlook.
Rising iron ore inventories at major Chinese ports, driven by higher arrivals and slower offtake, added to concerns, especially as Chinese steel production continues to decline amid subdued finished steel demand and the typical seasonal slowdown during summer.
Adding to the bearish tone, the U.S. announced a 50pct tariff on steel used in home appliances such as refrigerators, washing machines, and dryers, effective June 23. The move raised concerns over downstream steel demand.
While Chinese steel mills are still mostly profitable, thanks to falling raw material costs that have helped limit iron ore losses, the overall steel market outlook remains bearish. Protectionist policies from key importing countries on Chinese steel products are expected to dampen exports and persistent weakness in China’s property sector, historically a major steel consumer, are expected to affect domestic steel consumption.
On the Dalian Commodity Exchange, the most-traded September iron ore contract slipped 0.14pct to 703 yuan (USD 97.8) per ton, down 0.64pct compared to last Friday’s morning close.
Coke and coking coal futures posted modest gains, rising 0.75pct and 0.06pct to 1,349.5 yuan (USD 188) and 774.5 yuan (USD 108) per ton, respectively.
Meanwhile, on the Shanghai Futures Exchange rebar futures fell 0.2pct to 2,969 yuan (USD 413) a ton, HRC dropped 0.26pct to 3,082 yuan (USD 429) per ton, wire rod rose 0.28pct to 3,305 yuan (USD 460) per ton. Stainless steel futures declined 0.24pct to 12,550 yuan (USD 1,746) per ton.
1 USD / 7.18 yuan