Both raw material and steel prices in China have posted significant increases today, January 7, after the Chinese government announced that it will follow a loose monetary policy in 2026. The biggest jump was seen in import iron ore prices, steel prices have increased moderately, while coal futures have posted the maximum daily surge.
Iron ore with 62 percent Fe content has added $2.6/mt today, reaching $110.8/mt CFR. Prices have touched the $110/mt mark for the first time since July 2024. Market sources said that the strong jump in futures prices (by 4.09 percent at Dalian Commodity Exchange) owing to the improvement in sentiments and firm demand in both seaborn and port markets has resulted in a rise in spot prices today. 28 deals totaling 435,300 mt of iron ore have been signed at the Corex platform on January 7.
Both coking coal and coke futures at Dalian Commodity Exchange closed at up 7.98 percent, respectively, which is likely to support spot prices as well in the near future. The gains in the coking coal market are due mainly to talk about production suspensions at some mines in Shaanxi Province, which is the leading supplier of coking coal in China. “Some mines failed to get licenses,” a market source said, adding that the bigger impact will be on thermal coal supply, but coking coal may also be affected.
Spot rebar and HRC prices in China have edged up today by RMB 33/mt ($5/mt) and RMB 25/mt ($4/mt) to RMB 3,310/mt ($472/mt) ex-warehouse and RMB 3,350/mt ($477/mt) ex-warehouse, respectively, according to SteelOrbis’ data.
The main supportive factor for the struggling steel market has been yesterday’s announcement by the Chinese government of “a moderately loose monetary policy in 2026”, which will include reserve requirement ratio and interest rate cuts. In addition, it was stated that the PBOC will keep “the RMB exchange rate basically stable at a reasonable and balanced level”, which is a very important announcement after the appreciation seen since the second half of December. After these announcements on January 6, today the PBOC has already announced its intention to conduct a RMB 1.1 trillion ($157 billion) outright reverse repo operation to maintain liquidity in the banking system.
$1 = RMB 7.0187
