Dalian iron ore futures prices closed lower on Thursday, pressured by increasing supply from top miners Vale and Fortescue, and higher steel inventories at Chinese mills.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.55% lower at 811 yuan ($113.40) a metric ton.
The benchmark August iron ore (SZZFQ5) on the Singapore Exchange was 0.44% higher at $104.9 a ton, as of 0717 GMT.
Signs of stronger supply weakened iron ore prices on the Dalian exchange, ANZ analysts said in a note.
Top Brazilian miner Vale reported higher second-quarter production, up 3.7% year-on-year, while Australia’s Fortescue posted record fourth-quarter iron ore shipments on lower costs, beating analyst expectations.
The daily output of steel from key enterprises also increased by 2.1% month-on-month, while inventories climbed 3.9%, data from the China Iron and Steel Association showed.
Adding to this, China’s steel billet exports hit a record high from January to May at 4.72 million tons, nearly matching the full-year 2024 total, according to data from Chinese consultancy Mysteel.
Still, sentiment has been broadly positive this week following the announcement that China will be proceeding with the construction of the world’s largest hydropower dam, which has supported steel prices.
Other steelmaking ingredients on the DCE rose on Thursday, with coking coal NYMEX:ACT1! and coke (DCJcv1) up 7.97% and 1.97%, respectively.
China’s move to curb coal overproduction in key producing hubs continue to fuel expectations of a deeper demand-supply imbalance, supporting market optimism, said Mysteel Global.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar RBF1! and hot-rolled coil EHR1! climbed around 0.35%, stainless steel HRC1! dipped 0.08%, and wire rod (SWRcv1) lost 1.22%. Source: Reuters
