Iron ore futures traded lower on Thursday, extending recent volatility as a weak demand outlook across China’s steel sector continued to pressure the market.
Muted activity in the physical steel market has kept Chinese mills cautious. Analysts said that while a recovery in steel output could provide limited support to iron ore consumption, elevated portside inventories are likely to cap any near-term price upside.
Sentiment has also been weighed down by China’s new steel export licensing regime introduced in January 2026, alongside ongoing anti-dumping measures by key trading partners. These factors are expected to restrain steel exports this year, removing a key outlet that previously helped offset slowing domestic demand and reinforcing the bearish iron ore outlook.
Domestic steel consumption remains under pressure, with the property sector-traditionally China’s largest steel consumer-continuing to act as the main drag. Although manufacturing has become the leading source of steel demand, it has been unable to fully compensate for the structural decline in construction-related consumption. Reflecting this weakness, S&P Global Ratings revised down its forecast for China’s property sector, projecting a 10-14pct decline in property sales this year, compared with an earlier estimate of a 5-8pct fall, citing entrenched oversupply that may require government intervention to resolve.
Downstream weakness was further underscored by the automotive sector. China’s car sales fell 19.5pct YoY in January 2026, the sharpest drop since February 2024, according to the China Association of Automobile Manufacturers. In response, authorities issued new guidelines banning automakers from selling below production cost and tightening oversight of deceptive pricing practices and price coordination between automakers and parts suppliers.
The measures follow last year’s rollout of China’s so-called involution campaign, aimed at curbing destructive price wars in sectors such as steel and automotive that have compressed margins and fueled deflationary pressures.
On the Dalian Commodity Exchange, the most-traded May iron ore contract slipped 0.2pct to 762 yuan (USD 110.4) per ton. Coking coal and coke futures declined 0.53pct and 0.3pct to 1,120 yuan (USD 162) and 1,664 yuan (USD 241) per ton, respectively.
On the Shanghai Futures Exchange, rebar futures edged lower to 3,050 yuan (USD 442) per ton, while HRC futures fell 0.31pct to 3,218 yuan (USD 466). Wire rod futures declined 0.42pct to 3,330 yuan (USD 482), and stainless steel futures eased to 13,970 yuan (USD 2,024) per ton.
1 USD / 6.9 yuan
| Item | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
|---|---|---|---|
| Wire Rod | 3,330.00 | ↓ 0.42 | ↓ 0.18 |
| Hot Rolled Coils | 3,218.00 | ↓ 0.31 | ↓ 0.31 |
| Rebar | 3,050.00 | ↓ 0.23 | ↓ 0.13 |
| Stainless Steel | 13,970.00 | ↓ 0.21 | ↓ 1.25 |
| Iron ore | 762.00 | ↓ 0.20 | ↓ 0.07 |
| Coke | 1,664.00 | ↓ 0.30 | ↓ 0.18 |
| Coking Coal | 1,120.00 | ↓ 0.53 | ↓ 0.31 |
