Iron Ore Holds Decline as China Trading Resumes

Iron ore futures remained below CNY 750 per ton in late February, hovering at seven-month lows as mainland China markets reopened after the long Lunar New Year break. Trading on the DCE and SHFE was suspended from February 16 to 23 for the holidays, while equivalent contracts in Singapore declined over the same period. Meanwhile, industry data showed iron ore arrivals at major Chinese ports fell by 1.7 million tons in the latest week, offering some potential price support. Demand for the steelmaking raw material is expected to improve as economic activity in China resumes. Separately, Australia is closely monitoring negotiations between leading iron ore producers and China’s state-backed buyer, given the potential budgetary impact of lower ore prices. Iron ore is Australia’s top export commodity, and mining-related tax revenues remain a key pillar of federal finances.

Iron ore futures dropped below CNY 750 per ton in mid-February, hitting seven-month lows, as trading in mainland China paused for the Lunar New Year holiday running from Feb. 16 to 23. The steelmaking ingredient has faced sustained pressure in recent weeks as inventories in China approached record highs and mills scaled back operations ahead of the holiday. At the same time, supply expanded as major exporters Australia and Brazil increased shipments in late January. Meanwhile, work at the SimFer iron ore project in Guinea has been suspended following the death of an employee of a contracting firm. Looking ahead, investors are focused on a key parliamentary meeting in Beijing next month, where authorities are expected to outline annual economic targets and potentially unveil additional stimulus measures.

Iron ore futures steadied above CNY 760 per ton after sliding to multi-week lows in recent sessions, as markets drew some support from China’s central bank pledging additional financial backing to boost domestic demand. The pledge comes amid excess industrial capacity and weak consumption, which continue to weigh on business confidence and the growth outlook. Recent data showed consumer prices rose less than expected in January, while producer deflation extended for a 40th consecutive month, underscoring persistent deflationary pressures. Investors are now looking ahead to a key parliamentary meeting in Beijing next month, where authorities are set to outline economic targets for the year and may unveil fresh stimulus measures. Meanwhile, consumption in top importer China softened as manufacturers curtailed activity ahead of the extended Lunar New Year holidays. At the same time, supply pressures increased as major exporters Australia and Brazil ramped up shipments in late January.