Iron ore futures prices climbed on Monday, helped by firm near-term demand, falling portside stocks and healthy steel margins in top consumer China, although expectations of rising supply capped further gains.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! ended daytime trade 0.76% higher at 790.5 yuan ($110.15) a metric ton.
The benchmark September iron ore (SZZFU5) on the Singapore Exchange climbed 1.2% to $101.2 a ton, as of 0700 GMT.
Despite a weekly decline as of July 31, the average daily hot metal output remained above 240 million tons, a level typically seen as a sign of firm iron ore demand.
Profitability among steel mills also improved. Around two-thirds of steel mills were operating at a profit in the week as of July 31, up from 59% in early July, data from consultancy Mysteel showed.
Adding to the bullishness, portside stocks slid 0.6% from the prior week to 130.3 million tons as of August 1 – the lowest since February 2024, data from consultancy Steelhome showed.
However, expectations of increasing supply in the second half of the year limited price gains in the key steelmaking ingredient.
“Since miners kept their annual production guidance unchanged, it’s likely that shipments will ramp up in the remainder of the year, indicating growing supply,” broker First Futures said in a note.
Shipments in the first quarter were hampered by cyclones in Australia, dragging down overall volumes for the first half.
Other steelmaking ingredients on the DCE were mixed, with coking coal NYMEX:ACT1! erasing morning losses to end daytime trade up 2.33%, while coke (DCJcv1) dipped 0.15%.
Steel benchmarks on the Shanghai Futures Exchange moved sideways, with rebar RBF1! falling 0.28%, wire rod (SWRcv1) nudging down 0.03%, while hot-rolled coil EHR1! added 0.26%, and stainless steel HRC1! advanced 0.47%.
Source: Reuters