Iron ore futures rose on Tuesday, supported by strong near-term demand, though gains were limited due to steel output reductions in some regions of China.
Expectations of strong steel demand during the spring season and improved profitability have encouraged steel mills to ramp up production, boosting demand for iron ore.
However, long-term prospects remain uncertain as Beijing continues its efforts to curb steel overcapacity. Reports indicate that steel mills in Xinjiang have voluntarily reduced output by 10pct, with speculation that more regions may follow. Earlier this month, the National Development and Reform Commission (NDRC) reaffirmed its commitment to cutting excess steel production, though specific targets remain unclear. Rumors suggest reductions could range from 15-20 mln tons to as much as 50 mln tons.
Additionally, rising global protectionist measures against Chinese steel exports may further dampen demand for iron ore.
On the Dalian Commodity Exchange, the most-traded May iron ore contract rose 0.65pct to 776 yuan (USD 106.9) per ton, while coke and coking coal futures gained 1.47pct and 0.83pct, settling at 1,592 yuan (USD 219) and 1,027 yuan (USD 142) per ton, respectively. Despite these gains, all steelmaking raw material futures posted losses compared to yesterday’s morning session.
On the Shanghai Futures Exchange, rebar futures climbed 1.29pct to 3,220 yuan (USD 444) per ton, while HRC futures inched up 0.18pct to 3,386 yuan (USD 467) per ton, and wire rod futures rose 0.41pct to 3,438 yuan (USD 474) per ton. Stainless steel futures remained flat, closing at 13,355 yuan (USD 1,841) per ton. With the exception of rebar, all steel futures posted losses compared to yesterday’s morning session closing.
1 USD / 7.25 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,438 |
0.41 |
-0.32 |
| HRC | 3,386 |
0.18 |
-0.30 |
| Rebar | 3,220 |
1.29 |
0.50 |
| Stainless Steel | 13,355 |
0 |
-0.26 |
| Iron Ore | 776 |
0.65 |
-0.45 |
| Coke | 1,592 |
1.47 |
-0.22 |
| Coking Coal | 1,027 |
0.83 |
-0.29 |