Iron ore futures edge up on pre-holiday restocking

Iron ore futures rose slightly on Thursday, supported by restocking demand ahead of China’s National Day holidays (October 1-8), though the longer-term outlook remains bearish.

Chinese steel mills continue to replenish inventories, while higher steel output is also lending support to ore demand.

Daily crude steel production at China Iron and Steel Association (CISA) member mills averaged 2.07 mln tons in mid-September, down just 0.6pct from the previous 10-day period but up 4.3pct YoY.

Despite this, modest end-user demand is fuelling concerns that elevated output may lead to excess supply, putting pressure on finished steel prices.

A Chinese trader noted that domestic steel sales improved this week but said it remains unclear if momentum will carry into October.

Longer-term sentiment is weighed down by rising trade restrictions on Chinese steel exports and weaker demand from the property sector, which historically accounted for a large share of steel consumption.

On the Dalian Commodity Exchange, the most-traded January iron ore contract inched up 0.25pct to 805.5 yuan (USD 112.9) per ton. Coking coal gained 0.98pct to 1,234.5 yuan (USD 173), while coke rose 2pct to 1,760 yuan (USD 247) per ton.

On the Shanghai Futures Exchange, rebar added 0.32pct to 3,167 yuan (USD 444) and HRC gained 0.24pct to 3,358 yuan (USD 471). Wire rod slipped 0.37pct to 3,221 yuan (USD 452), while stainless steel edged up 0.19pct to 12,930 yuan (USD 1,813) a ton.

1 USD / 7.13 yuan