Iron Ore Firms on Lower Shipments

Iron ore futures held above CNY 780 per ton, staying near three-week highs as shipments from Australia and Brazil declined last week, leading to a drawdown in port inventories across China. Chinese steel mills have also been restocking ahead of the extended Labor Day holiday, providing additional support to prices. Meanwhile, reports indicated that Fortescue is nearing a supply agreement with China’s state-backed China Mineral Resources Corp, following a similar deal by BHP Group. Fortescue is currently operating under short-term contracts that have been extended while negotiations continue. Elsewhere, investors remain focused on developments in the Middle East amid stalled US–Iran peace talks, with the Strait of Hormuz still effectively closed, limiting access to a key export market for Chinese steel.

Iron ore futures climbed toward CNY 790 per ton amidst restocking activity in China ahead of the extended Labor Day holiday, alongside a rebound in domestic steel output. Shipments from Australia and Brazil also slowed, contributing to a drawdown in port inventories across China. Recent data showed stockpiles at Chinese ports fell 0.7% to 164.8 million tons last week, marking a second consecutive decline. Meanwhile, BHP Group reached a supply agreement with China’s state-backed iron ore buyer, resolving a months-long dispute that had unsettled the market. The Australian mining giant confirmed the deal while releasing its latest quarterly production figures, though it did not disclose specific contract details. BHP reported first-quarter iron ore output of 62.8 million tons, up 2% year-on-year, and maintained its full-year production guidance of 258 million to 269 million tons.

Iron ore futures rose above CNY 780 per ton, reaching their highest level in more than a week amid signs of resilient demand in top consumer China. Steel mills have also kept inventories relatively low, potentially driving restocking activity ahead of the May Day holiday from May 1 to 5. On the supply side, industry data showed port stockpiles in China declined 0.7% to 164.8 million tons last week, marking a second straight drop. Meanwhile, an ongoing dispute between state-backed China Mineral Resources Group and Australia’s BHP Group has clouded the supply outlook. At the same time, prolonged disruptions in the Strait of Hormuz have weighed on sentiment by 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.