Iron ore futures rise despite lingering demand concerns

Iron ore futures advanced on Friday, supported by steady near-term demand even as long-term outlooks remained uncertain.

According to the latest steel sector survey from the National Development and Reform Commission (NDRC), domestic steel demand remained stable, albeit slightly lower than the previous month due to seasonal trends in spring. However, the NDRC cautioned that escalating global trade tensions could undermine the cautiously optimistic sentiment in the sector.

Declining iron ore inventories at major Chinese seaports, coupled with a rise in steel production, also bolstered iron ore futures. Steel mills in China have started restocking iron ore, currently priced below USD 100 per ton.

Nonetheless, intensifying trade friction between China and the United States continues to cast a shadow over the longer-term steel market. U.S. President Trump recently raised tariffs on Chinese imports to 125pct, prompting a swift response from Beijing, which increased tariffs on U.S.-origin goods from 34pct to 84pct. Concerns persist over the possibility of even steeper retaliatory measures from China.

On the Dalian Commodity Exchange, the most active September iron ore contract climbed 0.71pct to 708 yuan (USD 96.5) per ton. In contrast, coke and coking coal futures declined by 1.42pct and 2.72pct, respectively, closing at 1,522 yuan (USD 208) and 892.5 yuan (USD 122) per ton.

Meanwhile, on the Shanghai Futures Exchange, rebar futures edged up 0.26pct to 3,131 yuan (USD 427), while HRC futures dipped 0.12pct to 3,242 yuan (USD 442) per ton. Wire rod rose 0.21pct to 3,358 yuan (USD 458), and stainless steel futures gained 0.31pct, settling at 12,765 yuan (USD 1,740) per ton.

1 USD / 7.33 yuan