Iron Ore Rises on China’s Industry Pledge

Iron ore futures climbed above CNY 760 per ton, reaching a three-week high after China reaffirmed its commitment to curb overcapacity in the steel sector, aiming to strengthen the health of the industry. Chinese steel mills continue to face pressure from persistent oversupply amid a prolonged property downturn, while steel exports are being constrained by protectionist measures abroad. Beijing also set a 2026 GDP growth target of 4.5%–5%, the lowest since the early 1990s, as the country contends with ongoing deflationary pressures and higher US tariffs. Data earlier this week showed that Chinese manufacturing and services sectors contracted for a second consecutive month in February, partly due to disruptions from the extended Lunar New Year holiday.

Iron ore futures hovered around CNY 750 per ton, holding within a narrow range as investors looked for demand signals from a key parliamentary meeting in top consumer China. Markets are closely monitoring the week-long “Two Sessions” annual gathering in Beijing, where policymakers are expected to set growth targets and outline policy priorities. Expectations for additional stimulus strengthened after official data showed Chinese manufacturing and services sectors contracted for a second straight month in February, partly due to disruptions from the extended Lunar New Year holiday. At the same time, iron ore demand eased as authorities instructed steelmakers to curb output to reduce pollution during the annual sessions. Elsewhere, traders assessed rising freight costs stemming from the widening Middle East conflict, which disrupted shipments through the Strait of Hormuz.

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.