Iron ore futures prices edged higher on Wednesday, with support from a modest pickup in China demand outweighing pressure from rising global supply and falling steel output.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) was trading 0.19% higher at 797 yuan ($112.57) a metric ton.
The benchmark December iron ore (SZZFZ5) on the Singapore Exchange was 0.71% higher at $106.55 a ton, as of 0718 GMT.
Global iron ore supply is expected to increase to a record of nearly 2.68 billion tons in 2026, with continued capacity expansions at mines in top producers Australia and Brazil, as well as the newly commissioned Simandou project in West Africa, consultancy Mysteel said in a note.
The World Steel Association reported lower global steel output for October, down 5.9% year-on-year to 143.3 million tons, while crude steel output from top producer China fell 12.1%.
China’s steel output will slip below 1 billion tons this year for the first time in six years, in line with a government pledge to reduce production and rebalance supply and demand in a sector struggling with overcapacity.
Chinese prices for locally produced iron ore concentrates remained stable across most production regions last week, even as demand among domestic steelmakers weakened, Mysteel said in a separate note.
The strong performance of iron ore derivatives and the resilience of imported ore prices supported the market, Mysteel said.
Domestic end-use steel demand has seen improvement in the fourth quarter, with infrastructure demand leading to higher apparent demand for steel, said Chinese broker Galaxy Futures.
Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 1.14% and 1.34%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar eased 0.06% and hot-rolled coil dipped 0.03%, while wire rod (SWRcv1) climbed 0.21% and stainless steel strengthened 0.65%.
Source: Reuters