Iron ore futures prices steadied on Wednesday, with analysts cautioning that the recent rally may have run ahead of market fundamentals.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed flat at 803.5 yuan ($112.87) a metric ton.

The benchmark September iron ore (SZZFU5) on the Singapore Exchange was 0.09% lower at $105.6 a ton, as of 0703 GMT.

The recent strength in iron ore appears overstretched, with fundamentals already reflected in current levels, said analysts from Citi.

While demand appears resilient from strong exports and steady blast furnace output, Citi warned that this support may be unsustainable as steel margins come under renewed pressure from an abundance of seaborne ore supply.

Despite poor per-ton steel profits at steel mills, hot metal output, a gauge of iron ore demand, remains high as inventories continue to accumulate on restocking ahead of the Chinese National Day holiday from October 1-8, said broker Hexun Futures.

Still, prices of domestically produced iron ore concentrates continued strengthening in most regions of China last week as the commodity remained in tight supply and high demand, according to data from Chinese consultancy Mysteel.

Broadly, the full brunt of the U.S. import tariff shock is still to be felt as fiscal support cushions China’s slowdown, the OECD said on Tuesday.

Despite slower growth in the second half of the year as the rush to ship exports before the U.S. tariffs recedes and fiscal support wanes, China’s economy is expected to grow 4.9% this year before slowing to 4.4% in 2026.

Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.24% and 1.14%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar edged up 0.03% and hot-rolled coil firmed 0.24%, while wire rod (SWRcv1) fell 1.19% and stainless steel dipped 0.08%.
Source: Reuters