Iron ore futures surged on Thursday, supported by reports that Chinese authorities plan to cut steel production to reduce excess supply.
Beijing aims to curb crude steel output between 2025 and 2026 amid persistent oversupply and weak demand, though no firm targets have been set. China’s crude steel output already dropped 3.1pct in the first seven months of 2024, according to Reuters.
Analysts noted that while production cuts could dampen iron ore consumption in the short term, they would also ease oversupply, lift steel prices, and improve mill margins, ultimately supporting iron ore demand if the plan is enforced. Previous government pledges to tackle overcapacity were not fully implemented.
Higher production levels are still propping up iron ore for now, but weak steel demand may weigh on output if the slowdown continues. The market also faces short-term pressure from environmental curbs on Tangshan mills ahead of a military parade in Beijing.
Meanwhile, rising trade protectionism poses a growing challenge for Chinese steel exports, which have been a key outlet amid domestic weakness. Baosteel also warned in its latest financial statement that escalating anti-dumping measures in Southeast Asia are adding pressure on exports.
On the Dalian Commodity Exchange, the most-traded January iron ore contract rose 1.74pct to 790.5 yuan (USD 110.4) per ton. Coking coal futures gained 0.9pct to 1,175 yuan (USD 164), while coke slipped 0.51pct to 1,672.5 yuan (USD 234) per ton.
On the Shanghai Futures Exchange, rebar futures rose 0.55pct to 3,129 yuan (USD 437), HRC climbed 0.83pct to 3,385 yuan (USD 473), and wire rod advanced 1.08pct to 3,358 yuan (USD 469). Stainless steel eased 0.19pct to 12,850 yuan (USD 1,796) per ton.
1 USD / 7.15 yuan
CHINESE STEEL FUTURES
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Date: 8/28/2025 |
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| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,358 |
1.08 |
1.01 |
| HRC | 3,385 |
0.83 |
1.06 |
| Rebar | 3,129 |
0.55 |
0.58 |
| Stainless Steel | 12,850 |
-0.19 |
0 |
| Iron Ore | 790.5 |
1.74 |
1.90 |
| Coke | 1,672.5 |
-0.51 |
0.18 |
| Coking Coal | 1,175 |
0.90 |
1.79 |
