In the latest market update, iron ore futures saw a drop in response to reduced hot metal production on Friday, July 5, 2024. Despite this, prices remain on track for a second weekly gain, driven by optimism surrounding additional Chinese economic stimulus measures.
The September iron ore contract on China’s Dalian Commodity Exchange fell by 2% to 845.5 yuan per ton, following the previous day’s one-month high. Meanwhile, August iron ore on the Singapore Exchange dropped by 3.3% to $110.2 per ton, despite earlier gains.
Analysts noted that some steel mills were hesitant to increase production due to facing losses. This, combined with lower hot metal output, limited the potential for an increase in production and affected iron ore prices.
Despite these challenges, hopes for economic stimulus measures from China have kept prices stable above $100 per ton. The upcoming third plenary session is expected to focus on reforms and modernization, potentially providing further support for the economy.
As the iron ore market navigates through various challenges, including potential production cuts to reduce emissions and supply constraints from top miners, prices are expected to remain volatile. Analysts predict an average price of $120 per ton in 2024, subject to continued government support and the property sector’s recovery.