Iron ore ticks up on near-term demand, but gains capped by long-term headwinds

Iron ore futures edged higher on Tuesday, supported by near-term demand, though gains were capped by ongoing concerns over long-term consumption.

Pre-holiday restocking ahead of the May holidays and increased steel production provided a boost to iron ore prices. However, lingering headwinds, including potential steel output cuts this year, growing protectionist measures against Chinese steel exports, and continued U.S.-China trade tensions, limited the upside. Additionally, rising iron ore supply contributed to a bearish outlook.

On the Dalian Commodity Exchange, the most-active September iron ore contract rose slightly by 0.28pct to 709 yuan (USD 97.2) per ton. In contrast, coke and coking coal futures fell by 1.02pct and 2.36pct, closing at 1,553 yuan (USD 213) and 932 yuan (USD 128) per ton, respectively.

Over on the Shanghai Futures Exchange, rebar and HRC futures dropped 1.2pct and 0.61pct, settling at 3,100 yuan (USD 425) and 3,210 yuan (USD 440) per ton. Wire rod futures climbed 0.4pct to 3,300 yuan (USD 452) per ton, while stainless steel futures edged up 0.16pct to 12,720 yuan (USD 1,744) per ton.

1 USD / 7.29 yuan