Iron ore prices in the futures market have risen to 690 yuan (CNY) per ton. This increase is due to hopes of replenishing stocks of Chinese steelmakers after the long holidays. Meanwhile, prices had fallen to their lowest level in four years last week, and expectations for steelmakers returning to the raw materials market have provided support in this regard.
Increased activity among steelmakers
Several steel mills are returning to the spot market this week to replenish their raw material inventories and maintain production levels. This action will help strengthen the market, although weaknesses in the fundamental principles of the market continue to hinder significant price increases.
Decline in coke prices and cost pressures
Additionally, the decline in spot coke prices has helped reduce cost pressures and limit losses for steel producers. This may slow the pace of production cuts. However, signs of increased global supply continue to impact market trends, as mines continue to ramp up shipments to meet seasonal and annual targets in the fourth quarter of this year.
Profitability challenges for Chinese steelmakers
According to recent data, only 6.9 percent of Chinese steelmakers were profitable at the end of September, indicating ongoing challenges in the sector. This statistic clearly reflects the difficult state of the steel industry in China and may influence future decisions by producers.
