Iron ore futures surged on Monday, supported by rising freight costs amid escalating tensions in the Middle East and expectations of improved steel demand.
Oil prices spiked as the conflict intensified following U.S.-Israel-led strikes on Iranian infrastructure and leadership and Iran’s retaliatory attacks on regional targets in Bahrain, Saudi Arabia and the UAE. The escalation has pushed oil and natural gas prices higher, increasing energy costs across industries. Concerns over potential disruptions to shipping through the Strait of Hormuz have also added to market volatility, lifting logistics and freight costs.
Iron ore prices were further supported by expectations of stronger steel demand during the traditional spring construction season. Adding to the bullish sentiment, major Chinese steelmaker Baosteel increased prices for most steel products by 200 yuan per ton, reflecting expectations of improved demand in the spring.
In the physical market, the rise in freight costs has created challenges for Chinese steel exporters who recently booked orders. Several traders reported that fixture notes had been cancelled citing force majeure, which could lead to cargoes being resold.
On the Dalian Commodity Exchange, the most-traded May iron ore contract jumped 2.28pct to 784.5 yuan (USD 113.4) per ton. Coking coal and coke futures also rose 5.51pct and 3.82pct to 1,168 yuan (USD 169) per ton and 1,740 yuan (USD 252) per ton, respectively.
On the Shanghai Futures Exchange, rebar futures increased 1.3pct to 3,119 yuan (USD 451) per ton, while HRC futures rose 1.58pct to 3,270 yuan (USD 473) per ton. Wire rod futures gained 1.44pct to 3,382 yuan (USD 489) per ton, while stainless steel futures fell 0.42pct to 14,105 yuan (USD 2,039) per ton.
1 USD / 6.91 yuan
| Item | Closing Price (in yuan) | Difference from Night Session (pct) | Difference from Previous Morning Session (pct) |
|---|---|---|---|
| Wire Rod | 3,382.00 | ▲ 1.44 | ▲ 1.27 |
| Hot Rolled Coils | 3,270.00 | ▲ 1.58 | ▲ 1.22 |
| Rebar | 3,119.00 | ▲ 1.30 | ▲ 0.99 |
| Stainless Steel | 14,105.00 | ▼ -0.42 | ▼ -0.71 |
| Iron ore | 784.50 | ▲ 2.28 | ▲ 1.59 |
| Coke | 1,740.00 | ▲ 3.82 | ▲ 2.56 |
| Coking Coal | 1,168.00 | ▲ 5.51 | ▲ 3.85 |
