Steel Market Update

Advisory Bazaar Info Services

Dalian Iron Ore Falls for Third Consecutive Session as Steel Mill Losses Widen

* Dalian iron ore futures declined for the third consecutive session, pressured by rising raw material costs and weaker steel mill profitability.

* The January iron ore contract on the Dalian Commodity Exchange (DCE) fell 0.28% to 715 yuan ($106.43) per metric ton.

* The contract touched its lowest level since August 24.

* In contrast, October iron ore futures on the Singapore Exchange rose 1.04% to $98.30 per ton.

* In Tangshan, the costs of hot metal and steel billets increased sharply. According to consultancy Mysteel, average steel mill losses exceeded 100 yuan per ton.

* Elevated maritime freight rates provided some support to iron ore prices, although the overall market direction remains uncertain.

* China’s steel exports increased 7.8% week-on-week to 2.55 million tons, marking the highest level in nearly eight weeks. Exports were also up 23.9% year-on-year.

* Other key steelmaking raw materials also weakened, with coking coal down 1.32% and coke declining 1.98%.

* Steel benchmarks on the Shanghai Futures Exchange (SHFE) also came under pressure, with declines seen across several products, including rebar and hot-rolled coil (HRC).

Market Outlook

Rising production costs and widening steel mill losses are weighing on iron ore demand and sentiment. However, stronger Chinese steel exports and elevated freight rates are providing some downside support. The near-term direction of the steel and iron ore market remains mixed and uncertain.