FX.co ★ Iron Ore Extends Gains on Bullish Fundamentals

Iron ore futures increased to approximately CNY 735.5 per tonne on Wednesday, continuing the upward trend from the previous session. This rise is attributed to tightening supply and enduring demand indicators. There has been a noted decline in shipments from key exporters Australia and Brazil to China, heightening concerns about restricted global supply. From a demand perspective, hot metal production, a crucial metric for iron ore consumption, has remained strong. Furthermore, China's manufacturing sector continues to demonstrate robust steel demand. Nonetheless, the broader economic outlook remains uncertain. Recent mixed data from China revealed a 0.1% year-on-year increase in consumer prices in June, the first positive figure observed in five months. Conversely, producer prices dropped by 3.6%, the most significant decline since July 2023, indicating heightened price competition and subdued domestic demand.