Iron ore futures prices fell on Monday, weighed down by the likelihood of China cutting crude steel output, although losses were capped by a continued rise in demand for the steelmaking ingredient.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.49% lower at 710.5 yuan ($97.32) a metric ton.
The benchmark May iron ore on the Singapore Exchange was 0.18% higher at $98.6 a ton, as of 0705 GMT.
China’s biggest listed steelmaker, Baoshan Iron & Steel, said a nationwide output cut was likely this year.
The state planner and the state-backed China Iron and Steel Association did not immediately respond to Reuters requests for comment.
China’s steel supply and demand will return to balance if the crude steel output this year is 50 million tons below last year, said Wu Wenzhang, chairman of consultancy Steelhome, as reported by the state-backed China Metallurgy News.
Steel consumption will fall around 30 million tons this year from 2024, while steel exports will drop between 15 million and 25 million tons this year, Wu added.
Still, prices were partially supported by resilient near-term demand as steelmakers have ramped up production.
Hot metal output rose to its highest since October 2023, reaching 2.4435 million tons last week, said broker Everbright Futures.
Hot metal output is typically used to gauge iron ore demand.
Other steelmaking ingredients on the DCE languished, with coking coal and coke down 1.66% and 1.2%, respectively.
Most steel benchmarks on the Shanghai Futures Exchange rose. Rebar RBF1! added nearly 0.61%, hot-rolled coil EHR1! gained 0.84%, stainless steel HRC1! was up 0.31%, while wire rod (SWRcv1) eased 0.57%.
Source: Reuters
