Key Moments
- Dalian iron-ore futures slipped 1.15% to 733.5 yuan ($107.83) a ton by 04:04 GMT and were down 1.7% so far this week.
- Chinese portside iron-ore inventories rose 1.3% from the prior week to 175.44-million tons as of June 25, according to Mysteel data.
- Global freight rates fell after a preliminary deal between the US and Iran, removing a layer of cost support for iron-ore prices.
Futures Prices Under Pressure
Iron-ore futures declined on Friday, with the market on course for a seventh consecutive weekly loss. Prices remained under pressure from rising inventories at Chinese ports, weakening steel demand in China, and a drop in global freight costs.
By 04:04 GMT, the most-active iron-ore contract on China’s Dalian Commodity Exchange (DCE) was down 1.15% at 733.5 yuan ($107.83) a ton, marking a 1.7% decline so far this week.
On the Singapore Exchange, the benchmark July iron-ore contract was last quoted 0.5% lower at $96.95 a ton, extending its weekly loss to 2.3%.
Rising Chinese Inventories
Portside iron-ore stocks in China continued to accumulate as shipments from major producers increased ahead of the end of the second quarter. This build-up in supply has kept prices for the key steelmaking raw material under sustained downward pressure.
Consultancy Mysteel reported that iron-ore inventories at Chinese ports rose 1.3% from the previous week to 175.44-million tons as of June 25.
| Market / Indicator | Latest Level | Move on Day | Move So Far This Week |
|---|---|---|---|
| DCE most-traded iron-ore | 733.5 yuan ($107.83) / ton | -1.15% | -1.7% |
| Singapore July iron-ore | $96.95 / ton | -0.5% | -2.3% |
| China portside iron-ore inventory (as of June 25) | 175.44-million tons | +1.3% vs prior week | n/a |
China Steel Demand and Trade Headwinds
Steel consumption in China has been negatively affected by hot summer weather, which limited outdoor activity in some areas, and by increasing trade barriers around the world that constrained steel exports.
“The rapid fall in downstream steel consumption will decide ore price movement in the medium term,” analysts at broker Everbright Futures said in a note.
Freight Rates and Related Steelmaking Inputs
Global freight costs declined after the US and Iran reached a preliminary agreement to end a war that had lasted more than three months. The easing in freight rates removed a layer of cost support that had previously helped underpin iron-ore prices.
Other steelmaking materials also weakened. Coking coal fell 0.88%, while coke dropped 1.13%.
Shanghai Steel Futures Mostly Weaker
Steel contracts on the Shanghai Futures Exchange mostly traded lower. Rebar futures lost 0.64%, hot-rolled coil decreased 0.51%, and wire rod slipped 0.15%. Stainless steel futures were little changed.
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