Iron Ore Gains on Demand Optimism

Iron ore futures climbed toward CNY 800 per tonne on Tuesday, marking a third consecutive session of gains amid growing optimism for future demand. Analysts pointed to reports that production at China’s key steelmaking hub of Tangshan will be halted from August 25 to reduce air pollution, a move seen as supporting prices. A halt in output could remove excess steel from the market, bolster steel mill margins, and lift demand for iron ore. Sentiment was further supported by the 90-day extension of the US-China trade truce, which gives negotiators more time to reach an agreement and helps stabilize trade relations between the world’s two largest economies. Still, seasonal demand weakness persisted, with extreme heat and heavy rainfall continuing to disrupt downstream construction activity. This slowdown has contributed to a build-up in steel inventories despite the recent gains in iron ore prices.