Iron Ore Advances on Strong China Data

Iron ore futures climbed above CNY 770 per ton, reaching a one-week high as stronger-than-expected economic data from top consumer China boosted market sentiment. China’s economy expanded 5% year-on-year in the first quarter, accelerating from 4.5% in the previous quarter and surpassing expectations of a 4.9% increase. An improving geopolitical backdrop also lent support, with reports indicating Washington and Tehran are considering extending their two-week ceasefire to allow more time for negotiations, even as the Strait of Hormuz remains effectively closed under a dual blockade. The conflict has disrupted trade flows, curbing metals shipments to the Gulf, a region that was China’s second-largest steel export destination last year, accounting for about 16% of its record-high exports.

Iron ore futures climbed to around CNY 760 per ton, supported by firmer demand as Chinese steel mills increased output amid a recovery in end-user consumption. Sentiment was also lifted by optimism over a potential diplomatic resolution to the Iran conflict, with a longer-term ceasefire expected to help revive Middle Eastern demand for Chinese steel. The conflict has disrupted trade flows through the Strait of Hormuz, reducing metals shipments to the Gulf. The region was China’s second-largest steel export destination last year, accounting for about 16% of its record-high exports. Meanwhile, data showed Chinese imports of iron ore and concentrates rose 11.5% year-on-year to 104.74 Mt in March, partly reflecting geopolitical shifts as cargoes initially destined for Middle East routes or nearby corridors were redirected toward East Asia.

Iron ore futures fell toward CNY 750 per ton, extending their recent decline following reports that state-backed China Mineral Resources Group permitted several steel mills to purchase cargoes from BHP Group, signaling a potential easing in a months-long commercial dispute. The development came after a visit to China by BHP’s incoming chief executive officer, Brandon Craig, who held meetings with executives from China Baowu Steel Group and CMRG. Data also showed that Chinese imports of iron ore and concentrates rose 11.5% year-on-year to 104.74 Mt in March, partly driven by geopolitical factors as shipments originally bound for routes through the Middle East or nearby corridors were redirected toward East Asian markets. Meanwhile, supply from Australia rebounded following earlier weather-related disruptions caused by Cyclone Narelle.