Iron ore futures continued to decline on Tuesday amid weakening demand fundamentals, driven by fresh reports of potential steel production cuts in China.
Tang Zujun, vice-president of the China Iron and Steel Association, emphasized the need for China’s steel industry to curb capacity expansion to address the ongoing supply-demand imbalance. Speaking at an event in Singapore, Tang highlighted that unchecked growth in steel output risks exacerbating market instability.
Adding to the bearish sentiment, market speculation suggests that several steel mills in Shandong province may soon initiate production cuts, further dampening confidence.
The downward trend in steel demand is also impacting the iron ore outlook. Although recent steel production figures show only a slight decline, they underscore a broader weakness expected to persist into the second half of the year.
Meanwhile, China’s strong steel export performance seen in early 2025 is anticipated to taper off in H2 as global protectionist measures gain momentum.
The most-traded September iron ore contract on the Dalian Commodity Exchange fell 1.76pct to close at 698.5 yuan (USD 97.1) per ton. Coke futures dropped 0.94pct to 1,364 yuan (USD 190) per ton, while coking coal edged down 0.12pct to 799.5 yuan (USD 111) per ton.
On the Shanghai Futures Exchange, rebar futures slipped below the key 3,000-yuan mark, settling at 2,980 yuan (USD 414) per ton. HRC futures declined 1.33pct to 3,111 yuan (USD 433) per ton. Wire rod futures dipped 0.34pct to 3,230 yuan (USD 449) per ton, and stainless steel futures eased slightly by 0.19pct to 12,855 yuan (USD 1,787) per ton.
1 USD / 7.19 yuan