FX.co ★ Iron Ore Holds Steady on Rising Steel Output

Iron ore futures stabilized at approximately CNY 807 per ton on Monday, maintaining levels close to a two-month peak, as Chinese steel production increased in anticipation of the National Day holidays. Industry data indicated a 0.2 percentage point growth in blast furnace operating rates, reaching 90.4% last week, primarily due to a resurgence in activity in Northern China. Additionally, hot metal output—a crucial indicator of iron ore demand—experienced a slight increase of 0.2% from the previous week, reaching 2.41 million tons per day. On the supply side, port inventories throughout China dipped marginally to 132 million tons. Concurrently, the People’s Bank of China maintained the one-year and five-year loan prime rates at 3% and 3.5%, respectively, for the fourth consecutive month, despite a recent rate reduction by the US Federal Reserve. To date, policymakers in Beijing have been reluctant to implement significant stimulus measures, even as various economic indicators continue to reveal fundamental weaknesses within the economy.