Iron ore futures extended their upward trajectory for the fourth consecutive session on Thursday, driven by the combination of dwindling inventories and pre-holiday restocking. However, these gains were tempered by concerns surrounding the persistent weakness in the steel market during the peak construction season.

The most actively traded January iron ore contract on China's Dalian Commodity Exchange (DCE) concluded daytime trading with a 0.82% increase, reaching $118.68 per metric ton.

Simultaneously, the benchmark October iron ore contract, SZZFV3, on the Singapore Exchange exhibited a 0.78% uptick, reaching $120.35 per ton as of 0702 GMT. This marked the highest level observed since March 17.

The experts from Sinosteel Futures observed that robust demand for raw materials by steel manufacturers relying on blast furnaces, along with anticipations of a surge in pre-holiday restocking and the backdrop of diminished inventories, contributed significantly to the buoyancy of iron ore prices. These factors coming together created favorable conditions for the increase in iron ore prices.

While iron ore shipments from suppliers have been steadily on the rise, there is anticipation of a swift recovery in consumption outside of China. This resurgence is likely to reduce some of the supply directed towards China, as observed by analysts at Galaxy Futures.

However, analysts at the National Australia Bank cautioned that there remained downside risks to iron ore prices unless further stimulus measures were introduced in China. The broader picture of steelmaking ingredients also saw strength, with coking coal and coke prices on the DCE surging by 2.93% and 1.56%, respectively.

On the Shanghai Futures Exchange, most steel benchmarks exhibited marginal gains due to the upswing in raw material prices and the consistent decline in stocks. Nonetheless, these gains were tempered by the lack of clear indications of improvement in downstream demand.

Rebar, a critical steel product, registered an increase of 0.56%, while hot-rolled coil advanced by 0.31%. Stainless steel recorded a growth of 0.29%, but wire rod experienced a minor dip of 0.32%.

Data from the consultancy Mysteel revealed that the total stocks of five major steel products experienced a decline of 2.3% during the week ending September 14, reducing the aggregate inventory to 15.79 million tons.

Analysts from Sinosteel added their perspective, stating, "It's expected that the demand increase from the property sector in the peak construction season will be relatively limited, given that it will take time for the stimulus measures to be eventually permeated through into the new starts (which generates most steel demand)."

In summary, iron ore futures displayed resilience by extending their gains for the fourth consecutive session. This upward momentum was primarily fueled by low inventories and the onset of pre-holiday restocking activities. However, the broader steel market's persistent weakness during the peak construction season posed concerns and limited the extent of these gains. The intricate interplay of supply, demand, and stimulus measures in China continues to shape the trajectory of iron ore prices and the broader steel industry.