Iron ore futures declined on Wednesday, pressured by mounting concerns over long-term demand.
The market faces several headwinds, including the potential for steel production cuts, hinted at by Baosteel earlier this week, and a slowdown in restocking activity ahead of the Labour Day holiday period (May 1-5).
Further dampening sentiment are rising protectionist measures targeting Chinese steel and ongoing trade tensions between the U.S. and China, both of which continue to cloud the outlook for iron ore demand.
Adding to the pressure, China’s manufacturing activity weakened in April. The official Manufacturing Purchasing Managers’ Index (PMI) fell to 49, down from 50.5 in March, indicating a contraction. Meanwhile, the Caixin China General Manufacturing PMI, which provides an independent view of the manufacturing sector, slipped to 50.4 from 51.2 in the previous month. A PMI reading above 50 signifies expansion, while a reading below 50 points to contraction.
On the Dalian Commodity Exchange, the most-active September iron ore contract fell 0.78pct to 703.5 yuan (USD 96.60) per ton. Coke and coking coal futures also declined, dropping 0.97pct and 0.59pct to 1,538 yuan (USD 211) and 930.5 yuan (USD 128) per ton, respectively.
Meanwhile, on the Shanghai Futures Exchange, rebar and HRC futures both fell just over 0.4pct, settling at 3,096 yuan (USD 425) and 3,204 yuan (USD 440) per ton. Wire rod futures slipped 0.18pct to 3,280 yuan (USD 451), while stainless steel futures dipped 0.24pct to 12,670 yuan (USD 1,740) per ton.
1 USD / 7.28 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,280 |
-0.18 |
-0.61 |
| HRC | 3,204 |
-0.44 |
-0.19 |
| Rebar | 3,096 |
-0.42 |
-0.13 |
| Stainless Steel | 12,670 |
-0.24 |
-0.39 |
| Iron Ore | 703.5 |
-0.78 |
-0.78 |
| Coke | 1,538 |
-0.97 |
-0.98 |
| Coking Coal | 930.5 |
-0.59 |
-0.16 |