Iron ore futures edge up amid mixed economic signals and demand uncertainty

Iron ore futures inched higher on Monday, supported by steady steel production and some encouraging economic indicators, though gains were capped by lingering concerns over long-term demand.

China’s official non-manufacturing Purchasing Managers’ Index (PMI), which tracks activity in services and construction, rose slightly to 50.5 in June from 50.3 in May, according to the National Bureau of Statistics (NBS). A reading above 50 indicates expansion.

Meanwhile, steel production by blast furnace-based producers remained at elevated levels, offering additional support to iron ore prices.

However, the manufacturing PMI stood at 49.7 in June, an improvement from April’s 49.0 and May’s 49.5, but still below the 50-point threshold, signaling continued contraction in factory activity.

Demand-side concerns also weighed on sentiment. Despite resilient short-term steel demand, a potential seasonal slowdown looms. Worries persist over possible steel output restrictions by Beijing later this year and a decline in steel exports amid growing protectionist measures by major importing countries targeting Chinese steel.

On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 0.21pct to 715.5 yuan (USD 99.88) per ton, marking a gain of over 2pct in June.

However, coke and coking coal futures declined by 0.46pct and 1.08pct, settling at 1,404 yuan (USD 196) and 825 yuan (USD 115) per ton, respectively.

On the Shanghai Futures Exchange, rebar futures edged up 0.23pct to 2,997 yuan (USD 418) per ton, while HRC rose 0.13pct to 3,123 yuan (USD 435) per ton. Wire rod dipped 0.09pct to 3,319 yuan (USD 463), while stainless steel futures advanced 0.16pct to 12,610 yuan (USD 1,758) per ton.

1 USD / 7.17 yuan