Iron ore dips as focus shifts to softening China steel demand (updated)

China Steel

05/06/2025 08:25

Updates prices on market close

By Amy Lv and Lewis Jackson

BEIJING, June 5 (Reuters) - Iron ore futures dipped on Thursday, as the focus shifted back to softening steel consumption in top consumer China's off-peak demand season.

The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 closed daytime trade 0.14% lower at 701 yuan ($97.60) a metric ton.

The benchmark July iron ore SZZFN5 on the Singapore Exchange lost 0.8% to $94.7 a ton, as of 0701 GMT.

Given the lack of core driving forces, prices of the key steelmaking ingredient are expected to fluctuate amid seasonally weak demand, analysts at Galaxy Futures said in a note.

"There is no big change to fundamentals in the iron ore market. The wave of upward momentum led by the price rally of coal faded, so ore prices also softened," said Zhuo Guiqiu, an analyst at broker Jinrui Futures.

However, downside potential is capped by a relatively high hot metal output, despite production cuts and declining portside inventories, Zhuo added.

Hot metal output is typically used to gauge iron ore demand.

Despite a trade truce between China and the United States, steel exports have recently shown signs of slumping, dragging demand, Galaxy's analysts added.

Weak steel consumption is also a downside risk for feedstocks.

Other steelmaking ingredients, coking coal DJMcv1 and coke DCJcv1, recorded further gains albeit at a slower pace, rising 1.68% and 0.56%, respectively, following Wednesday's more than 6% rally.

Steel benchmarks on the Shanghai Futures Exchange were range-bound. Rebar SRBcv1 nudged up 0.14%, hot-rolled coil SHHCcv1 lost 0.19%, wire rod SWRcv1 added 0.06% and stainless steel SHSScv1 advanced 0.2%.

($1 = 7.1822 Chinese yuan)

 (Reporting by Amy Lv and Lewis Jackson; Editing by Sumana Nandy and Eileen Soreng)

 ((Amy.Lv@thomsonreuters.com;))