Iron Ore Gains on China Stimulus Hopes, Tighter Supply

Iron ore futures rose to around CNY 815 per ton, rebounding after moving sideways over recent weeks as renewed expectations of policy support and stronger-than-expected economic signals from China lifted market sentiment. The upward move was largely driven by China’s manufacturing sector expanding at its fastest pace in about a year, indicating a pickup in industrial demand. Optimism was further supported after the People's Bank of China signaled it would continue with accommodative monetary policies, fueling expectations of additional stimulus measures. However, gains were capped by elevated inventory levels at Chinese ports, which remain near historic highs. At the same time, other steelmaking inputs moved lower. Prices of coking coal and coke declined, pressured by easing concerns over global energy supply disruptions amid indications that tensions involving Iran could de-escalate.

Iron ore futures stabilized above CNY 810 per ton, moving sideways over the past two weeks as investors assessed disruptions from the Middle East conflict and the impact of the cyclone season in Australia. Supply risks linked to the Iran war have lifted fuel and shipping costs, maintaining a risk premium on prices. Meanwhile, supply concerns eased after Tropical Cyclone Narelle caused only limited port disruptions in Australia’s Pilbara region. In China, production curbs in the steel sector weighed on iron ore demand, with authorities reaffirming efforts to reduce overcapacity amid slowing economic activity. Elsewhere, Australia’s BHP Group and state-backed China Mineral Resources Group remain at a standoff over their 2026 supply contract, although Beijing has temporarily eased the import ban on BHP’s Jimblebar fines.

Iron ore futures fell toward CNY 810 per ton and were set to end the week little changed, as Tropical Cyclone Narelle caused minimal port disruptions in Australia’s Pilbara region. China’s key steelmaking hub of Tangshan also activated a level-two emergency response to heavy air pollution this week, raising concerns about potential output curbs and tighter environmental inspections. During the annual parliamentary sessions in Beijing earlier this month, authorities reaffirmed their commitment to reducing overcapacity in the steel sector amid weakening demand. Meanwhile, supply disruptions and higher shipping costs tied to the Middle East conflict continued to keep a risk premium on prices. Separately, stockpiles of BHP’s Jimblebar fines at several Chinese ports declined to nearly a two-month low as steelmakers accelerated shipments during a short-lived one-week easing of the import ban.