Iron ore heads for first weekly gain in seven on falling port stocks

what happened

Iron ore futures rose on Friday as lower stocks at Chinese ports lifted the contract, putting it on course to end a six-week losing streak with its first weekly gain in seven. Reuters reported that the most-traded January contract on the Dalian Commodity Exchange (DCE) was up 0.67% at 675.5 yuan ($101.24) a metric ton. The November benchmark on the Singapore Exchange (SGX) gained 1.13% to $90.9 a ton.

ANZ Research analysts said lower shipments from Australia and Brazil, together with steady steel mill purchases, drove stock withdrawals, but the weather-related supply dip looks temporary as output in Brazil and Africa is set to recover. Iron ore stocks at major Chinese ports fell 0.54% week on week to 152.23 million tons, according to Steelhome. Weak property demand continues to weigh, and loss-making steel mills are buying only as needed while pushing for lower prices. Weekly steel consumption dropped to 8.24 million tons, and rebar apparent demand fell to 2.01 million tons, the lowest in nearly four years.

why it matters

For commodity markets, the rally rests on shrinking port inventories rather than firmer demand, which is a key point to watch. Coking coal on the DCE rose 2% and coke gained 0.83%, while rebar and hot-rolled coil fell on the Shanghai Futures Exchange. Weak steel demand remains the main risk for the iron ore market.

market impact

Iron ore and steel: falling port stocks support prices, while weak demand holds them back

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