Iron Ore Rises as China Tightens Curbs

Iron ore futures climbed to around CNY 815 per ton, recovering losses from earlier in the week after China reimposed buying restrictions on BHP’s Jimblebar product, tightening available supply. Beijing also introduced a secondary ban on BHP’s Newman fines amid an ongoing dispute between state-backed China Mineral Resources Group and BHP Group over the 2026 supply contract. On the demand side, industry data showed average daily hot metal output rose by 38,000 metric tons week-on-week and is expected to increase further. However, upside in prices may remain capped as port inventories in China continue to build, driven by strong shipments from producers and persistently weak steel demand amid the country’s prolonged property sector downturn. China’s crude iron ore output increased 1.3% year-on-year to 161.64 million metric tons in the first two months of the year.

Iron ore futures held below CNY 810 per ton, coming under renewed pressure after China’s state-backed buyer eased restrictions on BHP’s Jimblebar cargoes already held at Chinese ports this week. The move was widely seen as a concession to steelmakers grappling with supply challenges amid the prolonged dispute between CMRG and BHP Group. Meanwhile, seaborne shipments remain banned, potentially tightening supply in the near term. Analysts also noted that supply continues to outpace demand, with end-user consumption staying weak, while elevated spot prices may limit transactions. Chinese steel output declined in January and February, with mills holding back on inventory builds due to uncertain demand prospects.

Iron ore futures fell toward 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.