Iron ore futures ended higher on Thursday, helped by a softer dollar, although gains were limited by falling China lump ore premiums that signalled weak demand for the steelmaking material.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) inched 0.44% higher to 799.5 yuan ($112.92) a metric ton.

The benchmark December iron ore (SZZFZ5) on the Singapore Exchange was 0.29% higher at $106.85 a ton, as of 0703 GMT.

China’s seaborne iron ore lump premiums against 62% Fe fines had plunged 42.2% from two months ago, as of November 25, and hit their lowest level since late May 2024, said Chinese consultancy Mysteel.

Waning demand for lump ores from loss-suffering steelmakers have led to the weak premiums, Mysteel said.

India’s finished steel imports during the first seven months of the financial year were down 34.1% year-on-year, while China’s steel output is set to slip below 1 billion tons this year for the first time in six years after a government pledge to reduce production.

A decline in coking coal and iron ore prices has picked up pace due to increased coal supply and continued inventory accumulation at coal mines, said Chinese broker Galaxy Futures.

Pig iron production is expected to decline further this week, putting pressure on raw materials, Galaxy said.

The U.S. dollar index DXY was at 99.431, after dropping 0.28% in the previous day. A weaker greenback makes dollar-denominated assets more affordable to holders of other currencies.

Other steelmaking ingredients on the DCE were mixed, with coking coal NYMEX:ACT1! down 0.19% and coke (DCJcv1) up 0.03%.

Steel benchmarks on the Shanghai Futures Exchange were mostly down. Rebar RBF1! dipped 0.13%, hot-rolled coil EHR1! eased 0.27%, and stainless steel HRC1! lost 0.28%, while wire rod (SWRcv1) gained 0.78%.
Source: Reuters