Iron ore futures experienced a decline on Thursday, interrupting a three-day increase due to a stronger supply outlook stemming from rising shipments. However, seasonal demand for this essential steelmaking ingredient helped to mitigate the drop. The Dalian Commodity Exchange reported that the most-traded September iron ore contract closed at 720.5 yuan ($98.76) per metric ton, down 0.28%.
Additionally, the benchmark May iron ore on the Singapore Exchange fell by 0.99%, settling at $99.25 a ton. Recent reports indicated a rebound in shipments to China, with an increase of 178,000 tons, while port inventories saw a slight uptick on Monday, as noted by broker Hexun Futures. Moreover, iron ore shipments from Port Hedland, the largest iron ore terminal in Western Australia, witnessed a 30.3% month-on-month increase in March after a prior decline in February, according to consultancy Mysteel.
Despite the drop in iron ore prices, demand remained supported by a recovery in steel production. ANZ noted that improved profitability among steel mills contributed to steel production reaching 93 million tons in March, supporting positive growth for the first quarter. Furthermore, key steel enterprises reported a daily average steel production of 2.113 million tons in mid-April, reflecting a month-on-month increase of 3.3%, based on data from the China Iron and Steel Industry Association.
In broader market movements, Chinese equities drifted on Thursday amid signals from Washington regarding potential tariff reductions against China, although unilateral actions were ruled out. U.S. Treasury Secretary Scott Bessent described the current high tariffs between the two nations as unsustainable, indicating a willingness to ease trade tensions without unilateral steps. On the Dalian Commodity Exchange, other steelmaking materials such as coking coal and coke saw gains, while most steel benchmarks on the Shanghai Futures Exchange experienced slight declines.