Iron ore weakens as China steel demand concerns persist

Iron ore futures hovered around CNY 710 per ton, extending losses as concerns over weak Chinese steel demand and elevated inventories outweighed expectations for policy support and a seasonal pickup in demand.

China’s steel output fell 3.6% year-on-year to 76.93 million tons in July, the lowest for the month since 2017, while inventories remained elevated.

Weak property activity weighed on demand, with home prices down 3.2% year-on-year, while only about one-third of steelmakers were profitable.

Despite blast-furnace rates rising to 82.8% and further stimulus signals, near-term demand concerns persisted.

Still, fresh stimulus signals and expectations of stronger demand ahead of the September peak season provided support.

Vice Finance Minister Liao Min said China will roll out measures to boost domestic demand and growth, while the NDRC urged local governments to accelerate major projects.