Weak steel demand in China further drags down iron ore prices

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Weak steel demand in China further drags down iron ore prices

Ferrous 26 Jun 2024 11:01 AM IST Reuters

Iron ore futures prices fell for the fourth week in a row, weighed down by seasonally weak steel demand in top customer China. However, higher steel profits and steady consumption for the main steelmaking component helped to limit losses. On China's Dalian Commodity Exchange, the most traded September iron ore contract decreased by 0.69%, closing at $109.53 per metric tonne (MT). The benchmark July iron ore on the Singapore Exchange decreased by 0.19% to $102.4 a tonne.

The sluggish steel demand and the lingering prospect of a steel output cut have put downward pressure on iron ore prices, according to experts at SOOCHOW Futures. High portside stocks were mentioned by Maike Futures analysts as an additional obstacle for iron ore.

"Despite the persistent price fall, some traders are still holding confidence in the market amid the remaining high hot metal output as that means at least in the short term, ore demand will be firm," said a North China-brd trader, requesting anonymity as he is not authorised to speak to the media. Data from consultancy Shanghai Metals Market showed that hot metal output will likely see another rise this week.

Also, news that China's state planner said on Monday that it was urging local governments to ease car purchase restrictions boosted sentiment to some extent. Other steelmaking ingredients on the DCE fell, with coking coal and coke down 0.81% and 0.32%, respectively.

Steel benchmarks on the Shanghai Futures Exchange ticked down. Rebar retreated 0.42%, hot-rolled coil ticked 0.16% lower, wire rod shed 0.69%, and stainless steel dipped 0.11%. "Demand (for steel products) was not very well as heavy rains impacted both transportation and operations of construction sites," said a south China-brd steelmaker, adding that steel products are more likely to get rusted in rainy weather.

Also Read : Global steel production rises by 0.5% in June Steel prices rangebound in India amidst increasing import worries

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Weak steel demand in China further drags down iron ore prices

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