Iron ore futures slide on weak fundamentals

Iron ore futures retreated on Tuesday, reversing gains from the previous session when prices hit an eight-month high on supply concerns.

The earlier rally was fueled by reports that China would impose new port fees on U.S.-owned vessels. However, the Ministry later clarified that Chinese-built ships would be exempt, easing fears of widespread supply disruptions. The fees were introduced as a countermeasure to U.S. port charges on China-linked vessels.

Tuesday’s decline was also driven by profit-taking and a bearish outlook for the steel sector, where sluggish domestic demand continues to weigh on sentiment. According to the China Iron and Steel Association (CISA), inventories of five key finished steel products, rebar, wire rod, plates, CRC, and HRC, across 21 major cities reached 9.46 mln tons in the first ten days of October, up 4.9pct from late September.

Traders noted that post-holiday steel demand remains weak, while high output is pressuring prices. Without fresh policy support, they warned, a meaningful recovery looks unlikely. Export demand is also slowing as protectionist measures gain traction globally.

On the Dalian Commodity Exchange, the most-traded January iron ore contract fell 2.07pct to 782 yuan (USD 109.5) per ton. Coking coal futures edged up 0.74pct to 1,153.5 yuan (USD 162), while coke rose 0.36pct to 1,654.5 yuan (USD 232) per ton.

On the Shanghai Futures Exchange, rebar dropped 0.81pct to 3,061 yuan (USD 429), HRC slipped 0.7pct to 3,241 yuan (USD 454), wire rod eased 0.33pct to 3,340 yuan (USD 468), and stainless steel declined 0.95pct to 12,565 yuan (USD 1,760) per ton.

1 USD / 7.13 yuan