Iron ore gains on positive economic data, but demand outlook remains uncertain

Iron ore futures rebounded on Wednesday, supported by positive Chinese economic data, although concerns over the demand outlook continued to limit gains.

The market also drew support from a month-on-month increase in China’s steel exports in May and a decline in iron ore imports during the month.

China’s consumer inflation remained stable in May, while producer prices rose at a faster pace, reflecting improving conditions in parts of the country’s industrial sector. The National Bureau of Statistics (NBS) attributed the increase to ongoing industrial upgrading, stronger manufacturing activity and rising demand from sectors linked to artificial intelligence and computing infrastructure. Additional support came from seasonal demand, including coal stockpiling ahead of the peak summer power consumption season and increased demand from non-power sectors.

However, the outlook for iron ore demand remains uncertain due to high port inventories and the seasonal slowdown in steel consumption, which could continue to pressure prices in the near term.

Market sentiment also remained cautious after China’s Baosteel left prices for most flat steel products unchanged for July domestic sales.

On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 1.51pct to 771.5 yuan (USD 113.8) per ton. Coking coal fell 0.76pct to 1,363.5 yuan (USD 201) per ton, while coke gained 0.79pct to 1,983 yuan (USD 293) per ton.

On the Shanghai Futures Exchange, rebar futures advanced 0.98pct to 3,180 yuan (USD 469) per ton, while HRC futures gained 0.6pct to 3,380 yuan (USD 499) per ton. Wire rod futures rose 0.54pct to 3,370 yuan (USD 497) per ton, while stainless steel futures declined 0.76pct to 14,385 yuan (USD 2,123) per ton.

1 USD / 6.77 yuan