Steel Market Update

Advisory Bazaar Info Services

Iron Ore Prices Decline for Fifth Consecutive Session

* Iron ore futures fell for a fifth straight session as higher shipments and rising coke costs pressured steel mill margins.

* On the Dalian Commodity Exchange (DCE), the January iron ore contract declined 0.49% to 708 yuan ($105.52) per metric ton.

* On the Singapore Exchange (SGX), benchmark October iron ore futures fell 0.15% to $96.45 per ton.

* Global iron ore shipments increased by 1.59 million tons week-on-week to 35.17 million tons, indicating stronger supply availability.

* Higher coke prices and scheduled maintenance at some steel mills are expected to weigh on iron ore demand.

* China’s daily crude steel production fell 3% in August to an eight-month low, reflecting pressure on mill profitability.

* Falling new-home prices in China during August highlighted continued weakness in the property sector and its impact on steel demand.

* With profit margins under pressure, steel mills may remain cautious about building iron ore inventories ahead of the upcoming holidays.

* Prices of other key steelmaking inputs also edged higher, with coking coal up 0.95% and coke up 0.41%.

* Steel benchmarks on the Shanghai Futures Exchange (SHFE) were mixed, with rebar rising 0.26%, while stainless steel declined 0.18%.

Market Outlook:

Weak steel mill margins, rising iron ore supply and subdued property-sector demand in China are likely to keep pressure on iron ore prices in the near term.