Iron Ore Pressured by Tangshan Curbs

Iron ore futures remained below CNY 750 per ton, hovering near multi-month lows after the northern city of Tangshan, China’s largest steelmaking hub, activated a level-two emergency response amid forecasts of deteriorating air quality. Authorities had earlier instructed steel mills across Northern China to temporarily curb output to limit pollution during the annual sessions of the National People’s Congress. The annual “Two Sessions” runs from March 4 to around March 11, when policymakers are expected to set economic targets, outline policy priorities, and release the 15th Five-Year Plan covering 2026–2030. A sluggish recovery in steel demand following the Lunar New Year holiday, along with rising inventories, also weighed on mills’ appetite for restocking raw materials. Portside inventories climbed to a record 162.17 million tons last week, according to industry data.

Iron ore futures dropped to CNY 750 per ton, hovering near multi-month lows after Chinese authorities ordered steel mills in Northern China to temporarily reduce output to curb pollution during the annual meetings of the National People's Congress. Under the “blue skies” directive, mills were instructed to cut blast furnace production by 30% for one week starting March 4 to limit emissions in Beijing during the high-profile political gatherings. Analysts expect steel demand to weaken in the first half of the year amid ongoing property sector fragility and cautious industrial activity. Oversupply pressures also lingered, with iron ore inventories at major Chinese ports climbing to their highest levels since February 2022. Meanwhile, traders continued to evaluate the fallout from the US Supreme Court’s tariff ruling, which could spur additional protectionist measures and potentially disrupt global trade flows.

Iron ore futures climbed above CNY 750 per ton in late February, rebounding from seven-month lows as economic activity in China picked up following the long holiday, with steel mills expected to ramp up output. Still, analysts project that China’s steel demand will contract in the first half of the year, potentially limiting the scope for sustained price gains. Oversupply concerns also persisted, as iron ore inventories at Chinese ports rose to their highest level since February 2022. Market participants are assessing the implications of the US Supreme Court’s tariff ruling, which could prompt further protectionist measures and weigh on global trade flows. In corporate developments, Fortescue reported a 23% increase in first-half profit, supported by record iron ore shipments and firmer realized prices. Separately, Australia is closely monitoring negotiations between major iron ore producers and China’s state-backed buyer, given the potential fiscal implications of lower ore prices.