Iron ore futures posted modest gains on Wednesday, recovering from earlier losses as firm steel production levels in China continued to support near-term demand despite concerns over weaker seasonal steel consumption.
Market sentiment was initially pressured by expectations of slower steel demand during the summer period. In its latest monthly report, the China Iron & Steel Association (CISA) said the domestic steel market is expected to remain under pressure amid the seasonal slowdown in construction activity, high raw material costs, and uncertainty linked to tensions in the Middle East, which have pushed global energy prices higher.
However, Chinese steel mills continued to operate at relatively high production levels, with several mills resuming operations following scheduled maintenance shutdowns, supporting iron ore demand in the near term.
Market participants noted that high port-side iron ore inventories and increasing protectionist measures against Chinese steel exports are likely to limit further upside in iron ore prices. In addition, China’s proposed tightening of steel capacity replacement regulations, requiring elimination of 1.5 tons of outdated steelmaking capacity for every 1 ton of new capacity added, continued to weigh on the longer-term outlook for iron ore demand.
On the Dalian Commodity Exchange, the most-traded September iron ore contract edged up by 0.19pct to 800 yuan (USD 117.5) per ton. Coking coal and coke futures declined by 0.29pct and 0.28pct to 1,218 yuan (USD 179) and 1,782 yuan (USD 262) per ton, respectively.
On the Shanghai Futures Exchange, rebar futures slipped by 0.25pct to 3,189 yuan (USD 469) per ton, while HRC futures edged lower to 3,418 yuan (USD 502) per ton. Wire rod futures rose by 0.15pct to 3,349 yuan (USD 492) per ton, while stainless steel futures increased by 1.57pct to 14,900 yuan (USD 2,189) per ton.
1 USD / 6.8 yuan
| Item | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
|---|---|---|---|
| Wire Rod | 3,349.00 | ▲ 0.15 | 0.00 |
| Hot Rolled Coils | 3,418.00 | ▼ -0.03 | ▼ -0.29 |
| Rebar | 3,189.00 | ▼ -0.25 | ▼ -0.47 |
| Stainless Steel | 14,900.00 | ▲ 1.57 | ▲ 1.28 |
| Iron ore | 800.00 | ▲ 0.19 | ▲ 0.19 |
| Coke | 1,782.00 | ▲ 0.28 | 0.00 |
| Coking Coal | 1,218.00 | ▲ 0.29 | ▼ -0.25 |