Iron ore heads for weekly gain on steady demand, lower inventories

• Reuters

• Published On Aug 29, 2025 at 07:38 PM IST

Iron ore futures held steady on Friday but headed for weekly gains on firm Chinese demand and declining inventories.

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Iron ore futures traded in a narrow range on Friday, but were set for a weekly gain, supported by steady demand from top consumer China and falling inventories.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 0.77 per cent higher at 787.5 yuan ($110.10) a metric ton, with a weekly gain of 2.3 per cent.

The benchmark October iron ore on the Singapore Exchange was down 0.53 per cent at $103.55 a ton, as of 0814 GMT, but has climbed 3 per cent so far this week. Demand for the key steelmaking ingredient stood firm despite production restrictions in Tangshan, China’s top steel production hub, to ensure better air quality for the military parade on September 3 to commemorate the end of World War Two. Average daily hot metal output, a key indicator of iron ore demand, dipped by 0.3 per cent week-on-week to 2.4 million tons, as of August 28, but remained 8.7 per cent higher than the same period last year, according to data from consultancy Mysteel.

However, two analysts cautioned that output is likely to fall more steeply next week as the impact of the latest round of production controls takes hold, potentially putting downward pressure on prices.

A drop in portside stocks, which slid by 0.4 per cent from the prior week as per Mysteel data, also supported ore prices.

Boosting sentiment was also news that China will push to cut steel production between 2025 and 2026, as it tackles overcapacity that has hit prices and fed a worldwide protectionist backlash.

Other steelmaking ingredients, coking coal and coke , dipped 0.13 per cent and 0.87 per cent, respectively.

Most steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar fell 0.83 per cent, hot-rolled coil dipped 0.21 per cent, wire rod slid 0.69 per cent while stainless steel added 0.16 per cent.

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