Iron Ore Slips on Mideast Disruptions

Iron ore futures fell below CNY 810 per ton, pulling back further from two-month highs as rising freight costs driven by the Iran war disrupted Chinese steel exports, weighing on demand for the key steelmaking ingredient. Shipowners have been reluctant to commit tonnage for steel shipments amid market uncertainty, while elevated energy costs have kept steel prices firm, limiting transaction volumes. Chinese steel output also declined in January and February, with mills holding back on inventory builds due to uncertain demand prospects. Meanwhile, BHP Group said negotiations with China will continue after CMRG imposed a ban on its products to curb prices. CMRG has since temporarily eased some restrictions on BHP’s Jimblebar Fines following a sharp price rally, a move widely viewed as a concession to steelmakers facing supply challenges amid the prolonged dispute.

Iron ore futures fell toward CNY 800 per ton, pulling back from two-month highs after the state-backed China Mineral Resources Group said it would temporarily relax certain restrictions on BHP Group’s Jimblebar Fines following a sharp price rally. The decision is widely seen as a concession to steelmakers that have faced difficulties securing supply amid a prolonged dispute between CMRG and BHP. Prices had surged last week after CMRG expanded its ban on BHP iron ore for the second time in two weeks, informing mills that products such as Newman fines and lumps, along with Mining Area C fines, would be placed in the same restricted category as BHP’s Jimblebar blend. In response, Chinese mills rushed to transfer BHP ore from port inventories to their plants ahead of potential curbs. Over the past six months, China has gradually tightened limits on purchases of BHP iron ore while negotiating the terms of its 2026 supply contract.

Iron ore futures climbed above CNY 810 per ton and were poised to gain more than 5% for the week, as state-backed China Mineral Resources Group extended its ban on iron ore from BHP Group for the second time in two weeks amid a contract dispute. The CMRG also notified mills that products including Newman fines and lumps and Mining Area C fines, would be placed in the same restricted category as BHP’s Jimblebar blend. Chinese mills rushed to move BHP ore from port stockpiles to plants ahead of any curbs. Over the past six months, China has gradually tightened restrictions on purchases of BHP iron ore as it negotiated the terms of its 2026 contract. Last September, Jimblebar brand purchases were banned, followed by Jinbao products in November. CMRG was established in 2022 to centralize iron ore procurement and secure better terms from major mining companies.