Iron ore futures up as market eyes policy stimulus and trade developments

Iron ore futures edged higher on Tuesday, supported by firm short-term fundamentals. Steelmakers using blast furnaces have maintained high production levels, buoyed by healthy profit margins.

Additionally, lower port-side inventories added further support to iron ore prices. However, concerns linger over the potential for increased supply from major miners, which could weigh on the market.

Investor focus remains on this week’s Politburo meeting for possible new stimulus measures aimed at stabilizing China’s economic growth. Market participants are also closely monitoring the ongoing U.S.-China trade talks, where the two economic giants are negotiating to extend their fragile truce by another 90 days ahead of the August 12 deadline.

Recent government commitments to curb aggressive price competition in key sectors, including steel, have also been interpreted as a positive signal for iron ore demand.

On the Dalian Commodity Exchange, the most-traded September iron ore contract rose 0.63pct to 798 yuan (USD 111.3) per ton. In contrast, steelmaking raw materials saw continued weakness: coking coal futures fell 2.62pct to 1,120.5 yuan (USD 156), while coke dropped 6.63pct to 1,633 yuan (USD 228) per ton.

Meanwhile, on the Shanghai Futures Exchange, rebar futures climbed 1.98pct to 3,347 yuan (USD 467), HRC gained 2.01pct to 3,503 yuan (USD 489), and wire rod rose 2.33pct to 3,554 yuan (USD 496). Stainless steel edged down 0.12pct to 12,920 yuan (USD 1,802) per ton.

Overall, both steelmaking raw materials and finished steel futures posted gains compared to the previous day’s morning session.

1 USD / 7.16 yuan