Iron Ore Hits 1-Month High

Iron ore futures climbed toward CNY 770 per ton, reaching a one-month high as China renewed its commitment to support the steel sector by curbing excess capacity. Economic planners at the National People’s Congress signaled plans for orderly reductions in steel output capacity, a move that could lift steel prices and improve profit margins. This in turn may bolster demand for steel-making raw materials such as iron ore. Chinese steel mills continue to face pressure from persistent oversupply amid a prolonged property sector downturn, while steel exports are increasingly constrained by protectionist measures abroad. Meanwhile, Beijing set a 2026 GDP growth target of 4.5%–5%, the lowest since the early 1990s, as the country grapples with ongoing deflationary pressures and higher US tariffs.

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.