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Dalian Iron Ore Futures Inch Up, While Singapore Iron Ore Futures Fall Amid Oversupply Concerns

On Tuesday, Dalian iron ore futures displayed a slight upward movement in response to China’s latest policy guidelines, but Singapore iron ore futures faced a decline as oversupply concerns persisted in the market.

The most-traded September iron ore on China’s Dalian Commodity Exchange concluded daytime trading 1% higher, settling at 840.0 yuan ($117.22) per metric ton. Meanwhile, on the Singapore Exchange, the benchmark September iron ore (SZZFU3) declined by 0.8%, reaching $106.6 per metric ton at 0730 GMT, trimming gains from the previous session.

China’s Factory Activity Contraction Adds to Uncertainty

China’s factory activity revealed a contraction in July, according to a private sector survey on Tuesday. This echoed the official survey results from Monday, which indicated a fourth consecutive month of declining manufacturing activity in China, prompting hopes for additional stimulus measures.

However, despite the encouraging signs, the absence of specific details in the policy guidelines left the market indecisive. Investors were eager for concrete measures to boost the struggling economy and domestic consumption, especially as lackluster activity data increased pressure on officials to take action.

“Mysteel,” a research agency, projected downward fluctuations in iron ore prices for the upcoming week, citing relatively high arrivals of 23.29 million metric tons at 45 major Chinese ports, combined with the rollout of steel production curtailment policies.

Steel benchmarks on the Shanghai Futures Exchange showed mixed results, with the most-active rebar contract (RBF1) rising by 0.3%, hot-rolled coil (EHR1) falling by 0.1%, wire rod (SWRcv1) remaining relatively unchanged, and stainless steel (HRC1) increasing by 0.5%.

In addition to iron ore, other steelmaking ingredients experienced price movements, with Dalian coking coal (ACT1) and coke (DCJcv1) surging by 3.1% and 4%, respectively.

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