Iron ore futures rose on Monday, driven by improved steel demand and renewed hopes for stimulus following China’s tepid economic data, despite long-term concerns over demand for key steelmaking raw materials.
Steel trading activity in China showed signs of improvement, with declining weekly steel inventories at major warehouses as September and October are traditionally peak construction months. However, analysts caution that it is still early, and fundamentals could weaken if mills increase production, potentially leading to oversupply and pressure on finished steel prices.
According to the National Bureau of Statistics (NBS), China’s consumer price index (CPI) rose by 0.6pct YoY in August, up from July’s 0.5pct, while producer prices, measured by the producer price index (PPI), fell by 1.8pct YoY, a steeper decline than July’s 0.8pct drop. This was attributed to weak demand and lower international commodity prices. Despite the sluggish data, analysts expect the Chinese government to avoid large-scale stimulus, focusing instead on targeted measures to achieve its 2024 growth target of 5pct.
Higher port-side iron ore inventories, weak steel mill margins, and China’s troubled property sector continue to pose challenges for iron ore demand in the longer term.
On the Dalian Commodity Exchange, the most-traded iron ore contract rose by 0.44pct to 685 yuan (USD 96.6) per ton. However, coke and coking coal futures fell by 1.33pct and 0.81pct, respectively, to 1,780 yuan (USD 251) and 1,230.5 yuan (USD 173) per ton.
On the Shanghai Futures Exchange, rebar futures increased by 0.36pct to 3,078 yuan (USD 434) per ton, while HRC futures gained 0.87pct to 3,140 yuan (USD 443) per ton. Wire rod futures surged by 2.08pct to 3,431 yuan (USD 484) per ton, while stainless steel futures dropped by 1.45pct to 13,275 yuan (USD 1,872) per ton.
1 USD / 7.08 yuan
| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,431 |
2.08 |
1.52 |
| HRC | 3,140 |
0.87 |
1.40 |
| Rebar | 3,078 |
0.36 |
0.88 |
| Stainless Steel | 13,275 |
-1.45 |
-1.43 |
| Iron Ore | 685 |
0.44 |
0.15 |
| Coke | 1,780 |
-1.33 |
-0.98 |
| Coking Coal | 1,230.5 |
-0.81 |
-0.08 |
