Iron ore futures extended their rally on Friday, driven by solid near-term fundamentals and optimism over potential regulatory action from Beijing aimed at curbing aggressive price competition in the steel sector.
Market sentiment remained upbeat as iron ore inventories at major Chinese ports continued to decline on a weekly basis. Despite a slight recent dip in steel output, healthy profit margins for blast-furnace-based mills have sustained high production levels.
Adding to the momentum, finished steel inventories at major Chinese warehouses also fell, while major steelmakers announced price hikes: Shagang raised long steel prices by USD 7 per ton for mid-July sales, and Baosteel increased domestic HRC prices by USD 14 per ton for August.
The surge in both raw material and steel futures this week follows reports suggesting that Chinese authorities are preparing stricter measures to tackle cut-throat pricing practices across sectors including steel, contributing to ongoing deflationary pressures.
Still, some analysts caution that the rally is largely sentiment-driven. The long-term outlook for the steel sector remains bearish amid ongoing troubles in China’s property market and skepticism over Beijing’s commitment to addressing excess steel capacity. Iron ore demand also faces challenges, including growing trade barriers against Chinese steel exports, seasonal demand slowdowns, and the risk of deteriorating mill margins if raw material costs continue to rise.
On the Dalian Commodity Exchange, the most-active September iron ore contract rose 1.8pct to 764 yuan (USD 106.4) per ton. Coking coal and coke futures climbed 2.81pct and 3.34pct, respectively, closing at 1,519.5 yuan (USD 212) and 913 yuan (USD 127) per ton.
Meanwhile, on the Shanghai Futures Exchange, rebar gained 1.1pct to 3,133 yuan (USD 436), HRC rose 1.24pct to 3,273 yuan (USD 456), and wire rod increased 1.23pct to 3,370 yuan (USD 469). Stainless steel, however, edged down 0.82pct to 12,710 yuan (USD 1,771) per ton.
1 USD / 7.17 yuan
CHINESE STEEL FUTURES
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Date: 7/11/2025 |
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| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,370 |
1.23 |
1.13 |
| HRC | 3,273 |
1.24 |
0.34 |
| Rebar | 3,133 |
1.10 |
0.32 |
| Stainless Steel | 12,710 |
-0.82 |
-1.22 |
| Iron Ore | 764 |
1.80 |
0.07 |
| Coke | 1,519.5 |
2.81 |
1.48 |
| Coking Coal | 913 |
3.34 |
1.75 |
