Iron Ore Drops to 1-Month Low

Iron ore futures dropped toward CNY 780 per ton, hitting their lowest level in a month as abundant supply and subdued demand continued to pressure the market. Inventory levels remain elevated, while shipments from major producers Australia and Brazil have continued to increase, adding to supply-side pressure. Meanwhile, China’s iron ore imports rose 8% year-on-year in the first four months of the year to 418.6 million tons. On the demand side, sluggish downstream steel consumption has continued to limit steel mills’ appetite for raw material purchases. China’s steel output declined 2.8% from a year earlier to 86.63 million tons in April, marking the weakest April production level since 2018. Steel margins in China also remain under pressure amid persistent weakness in the country’s infrastructure and property construction sectors.

Iron ore futures climbed above CNY 790 per ton, recovering from three-week lows as global steel production declined in April at a slower pace than in March, with the contraction in China’s steel output also moderating. The data offered some support to sentiment in the iron ore market, though underlying demand conditions remained fragile. Steel margins in China continue to face pressure amid ongoing weakness in the country’s infrastructure and property construction sectors. Last week, iron ore prices fell to multi-week lows as higher shipments from Australia and Brazil increased supply pressures, while Chinese steel mills continued to grapple with elevated inventory levels. Supply is also expected to rise further in the coming weeks, even as demand growth remains constrained, with blast furnace utilization rates already operating at relatively elevated levels.

Iron ore futures fell toward CNY 790 per ton, reaching their lowest levels in about three weeks as increased shipments from Australia and Brazil added pressure to the market while Chinese steel mills continued to struggle with elevated inventories. Industry data showed that iron ore shipments from the two major exporters rose week-on-week, while portside stockpiles across 47 Chinese ports increased by 4.2 million tons. Supply is expected to climb further in the coming weeks, even as demand growth remains limited with blast furnace operations already running at relatively high utilization rates. Meanwhile, domestic steel demand in China continued to face headwinds from weak construction activity and broader economic uncertainty. Demand for Chinese steel exports also softened, as overseas buyers remained reluctant to purchase cargoes at elevated price levels.