Steel Market Update

Advisory Bazaar Info Services

Iron Ore Prices Extend Losses as Weak Steel Demand and Rising Inventories Weigh on Market

Iron ore prices remained under pressure, with Dalian iron ore futures declining for a seventh consecutive session amid weak demand from Chinese steel mills, rising port inventories, and ample global supply. Market sentiment also remained subdued after China’s latest Politburo meeting failed to deliver the expected economic stimulus measures.

Key Highlights

* The September iron ore contract on the Dalian Commodity Exchange (DCE) fell 2.16% to 703 yuan ($104.14) per metric ton.

* Benchmark Singapore Exchange (SGX) iron ore declined 1.65% to $94.30 per ton.

* China’s blast furnace operating rate slipped 0.24 percentage points to 81.85%, while steel mill profitability declined 0.86 percentage points to 33.77%.

* Major Chinese steelmakers Zhongtian Steel and Jiangsu Yonggang cut rebar and wire rod prices by 100 yuan per ton, reflecting weaker domestic demand.

* Analysts at Galaxy Futures maintain a bearish near-term outlook for iron ore, citing slowing steel demand.

* Iron ore inventories at China’s major ports increased 0.37% week-on-week to 156.46 million metric tons.

* Strong global iron ore shipments continue to keep supply elevated despite seasonally weaker demand.

* Market sentiment weakened further after China’s recent Politburo meeting did not introduce the anticipated stimulus measures.

* Prices of key steelmaking raw materials, including coking coal and coke, also moved lower.

Market Outlook

Iron ore prices are expected to remain under pressure in the near term as weak steel demand, rising inventories, and abundant global supply continue to weigh on the market. However, any additional economic stimulus from China could improve sentiment and provide support to iron ore prices.