Iron ore futures extend gains as Tangshan steel curbs lifted

Iron ore futures rose on Thursday, supported by expectations of higher demand after Tangshan steel mills resumed operations following the end of Beijing’s military parade-related output curbs on September 3.

Analysts cautioned, however, that the gains were partly driven by speculative trading, as steel demand fundamentals remain weak.

Rising inventories of finished steel products are weighing on the market, with the China Iron and Steel Association (CISA) reporting a 4.7pct increase in stockpiles across 21 major cities in late August compared to mid-August levels.

With steel demand softening, Chinese mills may be forced to trim production to protect margins. At the same time, growing protectionist measures against Chinese steel exports could undermine one of the few bright spots for the sector this year.

On the Dalian Commodity Exchange, the most-traded January iron ore contract climbed 1.67pct to 791.5 yuan (USD 110.8) per ton. Coking coal fell 1.97pct to 1,094.5 yuan (USD 153), while coke slipped 1.37pct to 1,581.5 yuan (USD 221) per ton.

On the Shanghai Futures Exchange, rebar eased 0.06pct to 3,117 yuan (USD 436), while HRC inched up 0.24pct to 3,313 yuan (USD 464). Wire rod rose 0.34pct to 3,269 yuan (USD 458), but stainless steel dropped 0.58pct to 12,855 yuan (USD 1,800) per ton.

1 USD / 7.14 yuan