Iron ore prices held steady just above their lowest close since mid-January, as investors weighed the impact of potential reductions in steel production in China. Futures were trading above $100 per ton, after declining more than 1% on Wednesday, following a statement from China’s economic planning agency. The agency revealed plans to mandate steel production cuts in a bid to address overcapacity issues. According to Citigroup Inc., this marked the first time the agency proposed cuts in steel output as part of its draft plans.
China’s legislative sessions will continue on Thursday, with market participants closely monitoring discussions for further details on these production cuts. Key agencies, including the National Development and Reform Commission (NDRC), are scheduled to hold a press conference later in the day during the annual National People’s Congress.
After a challenging 2024, when the country’s property crisis negatively affected iron ore demand, the market has largely stabilized in early 2025. As China enters its peak demand period in March and April, some analysts remain optimistic that consumption could see an uptick. Shanghai Metals Market analysts suggested that any improvements in demand could spark a rebound in iron ore prices, potentially shifting the market back to a fundamentals-driven trading approach. However, they also cautioned that high shipment levels and loose supply-side conditions could limit the extent of this recovery.
As of 11:35 a.m. in Singapore, iron ore futures were priced at $100.25 per ton, up 0.5%. Earlier, the contract had risen as much as 1.4%. In China, yuan-denominated futures in Dalian were largely unchanged, while steel contracts in Shanghai showed gains.
In the base metals sector, copper rose by 0.4% to $9,623 per ton on the London Metal Exchange, positioning it for its highest close since November. Market sentiment has been influenced by concerns that the U.S. administration under former President Trump may impose tariffs on copper imports. Futures on the Comex in New York have outpaced the gains seen on the LME. Meanwhile, aluminum, zinc, and nickel also saw price increases.
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