Steel Market Update

Advisory Bazaar Info Services

* Dalian iron ore futures rose for the third consecutive session, gaining 0.35% to 716.5 yuan ($106.19) per metric ton.

* The rise was supported by supply concerns stemming from a potential strike at BHP Group’s Port Hedland operations and growing tensions in negotiations with Rio Tinto.

* However, the benchmark September iron ore contract on the Singapore Exchange declined 0.63% to $95.50 per ton, indicating a mixed outlook across iron ore markets.

* Amid ongoing negotiations with unions, a two-day strike at BHP’s Port Hedland, a major iron ore export hub, is scheduled for this weekend, keeping supply risks in focus.

* China’s state-backed iron ore purchasing agency reportedly instructed some steel mills to halt negotiations with Rio Tinto, increasing pressure on the producer.

* Meanwhile, signs of weakening steel demand have emerged in China, with pig iron production among major steelmakers declining 4.7%.

* Total supply of five major steel products fell 1.5%, while inventories increased 1.1%, suggesting softer downstream demand.

* Other steelmaking raw materials on the Dalian Commodity Exchange (DCE) also advanced, with coking coal rising 2.03% and coke gaining 2.94%.

* Steel benchmarks on the Shanghai Futures Exchange (SHFE) were mixed. Rebar and hot-rolled coil prices edged higher, while wire rod prices remained unchanged.

Market Outlook

Overall, iron ore prices continue to receive short-term support from supply-side concerns, particularly around potential disruptions at Port Hedland. However, signs of weaker steel demand and rising inventories in China could limit further gains. Market participants will closely monitor BHP’s labor negotiations, developments involving Rio Tinto, and Chinese steel production activity for the next directional cues.