FX.co ★ Iron Ore Slips on Weakening China Demand

Iron ore futures eased toward CNY 730 per ton, retreating from six-week highs amid mounting concerns over demand in top consumer China as steelmakers’ margins continued to erode. Industry data showed that only about 30% of steel producers were profitable as of September 4, down from 32.5% a week earlier and well below 61% in the same period last year. Another report indicated that China’s blast furnace operating rate slipped to 89.08%, a week-on-week decline of 0.48 percentage point, while average daily pig iron output fell by 5,200 mt to 2.4028 million mt. At the same time, China’s state-owned iron ore importer, China Mineral Resources Group, has advised several steelmakers to refrain from purchasing Rio Tinto Group’s flagship Pilbara Blend ore. In parallel, South Korean logistics and shipping company HMM signed a long-term shipping contract with Brazilian miner Vale worth around US$3.5 billion to transport iron ore starting in 2030.