Iron ore futures edge higher, but demand concerns persist

Iron ore futures posted modest gains on Thursday, supported by higher steel production. Although overall steel output has slowed, mills are still operating at relatively high levels, limiting the drop in iron ore consumption.

The gains were also capped by seasonal weakness in steel demand and the lack of major stimulus for China’s struggling property sector. While steel consumption has improved in sectors like home appliances, automotive, and energy, it remains insufficient to offset the ongoing slump in construction-related demand.

Rising iron ore inventories at major Chinese ports and geopolitical tensions in the Middle East also added to demand concerns.

On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 0.43pct to 698 yuan (USD 97.1) per ton. Meanwhile, coke and coking coal futures slipped 0.11pct and 0.13pct, to 1,374 yuan (USD 191) and 790.5 yuan (USD 110) per ton, respectively.

Steel futures on the Shanghai Futures Exchange remained largely range-bound. Rebar and HRC inched up 0.13pct to 2,986 yuan (USD 415) and 3,103 yuan (USD 432) per ton, respectively. Wire rod rose 0.12pct to 3,306 yuan (USD 460) per ton, while stainless steel futures gained 0.68pct to 12,575 yuan (USD 1,750) per ton.

1 USD / 7.18 yuan