Iron ore reverses to losses as weakening China steel consumption drags

BEIJING: Iron ore futures prices fell on Thursday, reversing from earlier gains, with weakening downstream steel consumption dampening sentiment and investors hungry for clues on details about anticipated stimulus from top consumer China.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.06% lower at 776.5 yuan ($106.38) a metric ton. It hit 787 yuan earlier in the session, its highest since Dec. 18.

The benchmark January iron ore on the Singapore Exchange was down 0.14% at $100.95 a ton, as of 0816 GMT, after hitting an intraday high at $101.9 a ton earlier. Apparent consumption of five major steel products slipped by 2.1% week-on-week to around 8.53 million tons as of Dec. 26, after falling 1.2% last week, data from consultancy Mysteel showed. Earlier in the day, prices found support from lingering expectations of Beijing unveiling more stimulus and persistent pre-holiday restocking from Chinese steel mills.

China’s efforts to stabilise and prevent further declines in its real estate market will continue in 2025, China Construction News reported, citing the housing regulator’s conference on Tuesday and Wednesday. “Steelmakers continued to replenish feedstocks, with inventories of imported iron ore at mills increasing further,” analysts at Sinosteel Futures said in a note.

“Supply is expected to seasonally slow in January, which will help ease the pressure of high portside stocks.” The Chinese New Year starts from Jan. 28 and domestic steelmakers usually build up stock ahead of that to meet production needs during and after the holidays. Other steelmaking ingredients on the DCE were mixed, with coking coal and coke down 1.08% and 0.74%, respectively.

Steel benchmarks on the Shanghai Futures Exchange strengthened. Rebar nudged up 0.03%, hot-rolled coil advanced 0.18%, wire rod gained 1.24% and stainless steel ticked up 0.08%.