Iron ore futures climbed on Thursday, supported by China’s renewed efforts to reduce industrial overcapacity and stabilize its economy. The most-traded September iron ore contract on the Dalian Commodity Exchange rose by 1.35% during the morning session, closing at 725 yuan ($101.19) per ton. On the Singapore Exchange, August deliveries gained 1.1% to reach $96.20 per ton as of 9:23 a.m. Mecca time.
Market analysts attributed the gains to Beijing’s recent measures aimed at curbing aggressive price competition and addressing structural imbalances in heavy industries. According to ANZ Bank, the Chinese government’s steps to reduce steel overproduction reflect a broader policy response to ongoing deflationary pressures, signaling intent to stabilize domestic demand and industrial profitability.
These policy moves are expected to provide much-needed support to the steel sector, which continues to grapple with persistent overcapacity and volatile pricing. China’s steelmakers have faced prolonged challenges from low margins and weakening demand, with excess supply fueling fluctuations across upstream commodities like iron ore. The government’s intervention is viewed as a strategic effort to steer the industry toward healthier fundamentals and avoid further economic drag from deflation and industrial inefficiencies.
