Steel Market Update

Advisory Bazaar Info Services

Iron ore futures gained amid declining inventories at Chinese ports and measures by the central bank to increase market liquidity.

* Dalian Commodity Exchange (DCE): January iron ore futures rose 0.57% to RMB 711.5/tonne ($105.50). The contract’s weekly decline narrowed to 0.63%.

* Despite the recovery, iron ore remains on track for a fourth consecutive weekly decline, pressured by weak economic data and disruptions caused by typhoons.

* Singapore Exchange (SGX): Benchmark September iron ore futures climbed 0.79% to $96.25/tonne, bringing the weekly gain to 1.26%.

* Iron ore inventories at Chinese ports declined 0.18% week-on-week to 156.81 million tonnes.

* The People’s Bank of China (PBOC) is reportedly planning a RMB 1 trillion reverse repo operation to support economic activity and market liquidity.

* Daily steel production at surveyed mills increased to 2.38 million tonnes, while mill profitability improved to 33.77%.

* China’s state-owned iron ore procurement platform is encouraging domestic traders to purchase directly through its platform, with the aim of strengthening control over trading and pricing.

* Raw materials used in steelmaking showed a mixed trend. Coking coal rose 1.36%, while coke declined 0.34%.

* Steel benchmarks on the Shanghai Futures Exchange (SHFE) recorded a mixed performance across major products.

Market Outlook

Iron ore prices are showing signs of a short-term recovery, supported by lower port inventories and expectations of additional liquidity measures. However, weak economic indicators, elevated steel production and weather-related supply disruptions could continue to limit the upside and keep volatility high.

Advisory Bazaar Info Services