Dalian Iron Ore Prices Decline Amid Concerns Over Chinese Demand
Dalian iron ore futures fell for the fourth straight session, closing at 762 yuan due to demand concerns in China. In contrast, the benchmark on the Singapore Exchange rose slightly. Citi predicts a decline in steel demand for 2025, while EU plans to tighten steel import quotas aim to curb cheap steel inflows, potentially affecting China’s exports and prices.
Dalian iron ore futures experienced a decline for the fourth consecutive session on Thursday, due to ongoing concerns regarding demand from China, the world’s leading consumer. The most actively traded May iron ore contract on the Dalian Commodity Exchange closed at 762 yuan per metric ton, down 0.5%, following a low not seen since January 10 earlier in the day.
Conversely, the benchmark April iron ore price on the Singapore Exchange saw a slight increase, rising by 0.4% to reach $100.6 per ton. A report from Citi indicated that steel demand in China’s property sector and exports is expected to fall by approximately 10% and 4% to 5% in 2025, respectively. Furthermore, the overall steel demand in China for this year might decrease by 5% to 6%, although there may be a modest uptick in demand from the home appliances and automotive industries.
Additionally, a senior official from the European Union announced plans to tighten steel import quotas, aiming for a 15% reduction in inflows beginning in April. This policy seeks to prevent an influx of cheap steel into the European market following new tariffs imposed by the United States. This series of protective measures could negatively impact China’s steel exports this year, thereby exerting downward pressure on steel prices and diminishing the demand for feedstock materials.
The decline in iron ore prices was noted even after Mineral Resources of Australia announced a temporary halt in haulage operations at its Onslow Iron project due to a recent road train accident. Other steelmaking commodities also saw lower prices on the Dalian Commodity Exchange, with coking coal and coke dropping by 0.2% and 1.2%, respectively. However, certain steel benchmarks on the Shanghai Futures Exchange reported modest gains, with rebar increasing by 0.2%, hot-rolled coils rising by 0.1%, and wire rods gaining approximately 1%. Conversely, stainless steel saw a minor decrease of 0.3%.
In conclusion, the Dalian iron ore market is currently affected by significant worries regarding future demand, particularly from China, in light of a global trade slowdown. Despite slight gains in other commodities and fluctuations in steel benchmarks, the overarching trend suggests a challenging outlook for both iron ore prices and China’s steel exports under emerging protective trade measures. Stakeholders in the industry will need to navigate these complexities as they assess market conditions going forward.
Original Source: www.tradingview.com
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