STEEL NEWS

Iron ore in China grows for the seventh consecutive quarter

As of June 30, Dalian iron ore futures rose for the seventh straight quarter as of June 30, despite falling margins at Chinese steel mills weakening prices in June's final trading sessions, Reuters reported.

The top-selling iron ore for September delivery on the Dalian Commodity Exchange closed the morning session down 1.8% to 1,153 yuan ($ 178.58) a tonne, down 15.1% from its May 12 record.

Nonetheless, Dalian iron ore futures will end the quarter with a gain of nearly 20%, helped by a record rally in May.

Strong demand for raw materials in China, the world's largest steel producer, has driven iron ore prices to record highs, also driven by what the Chinese authorities have called excessive market speculation.

Expensive raw materials, coupled with declining demand for steel products in China, are now weighing on the profitability of steelmakers, analysts said.

“Steel prices have plummeted from their all-time highs in May,” said Robert Rennie, head of financial market strategy at Westpac. "With coking coal at its highest level in two years and near-all-time iron ore, the profitability of steel mills has plummeted."

However, on the Singapore Exchange, the most active August contract for iron ore stood at $ 200 per ton.

According to the consulting company SteelHome, the spot price for the reference material containing 62% was $ 215 per ton on Tuesday.

“As we scale up (China) iron ore reserves to slightly reduce production or steel imports, the price of iron ore looks increasingly inappropriate,” Rennie said.

"If these downward trends in steel production continue throughout the summer, this argument will become even more compelling."

Steel rebar contracts on the Shanghai Futures Exchange rose 0.1% and hot rolled coil rose 0.7%. Stainless steel added 0.9%.

Dalian coking coal fell 0.9% and coke fell 2.3%.