Iron Ore Weakens to Near 2-Month Low

Iron ore futures fell below CNY 760 per ton, sinking to a near two-month low after data showed China’s iron ore imports dropped nearly 6% in May from the previous month, defying expectations for an increase amid improved steel margins and higher shipments from major producers. China imported 97.71 million tons of the key steelmaking ingredient last month, down from 103.9 million tons in April and below analysts’ forecasts of 104 million to 110 million tons. Analysts attributed the decline to cautious purchasing by steelmakers, who have limited buying to immediate needs ahead of a seasonally weaker demand period. Demand from China’s steel sector has also softened earlier than usual this year, as persistent rainfall and the early arrival of summer heat have slowed construction activity.

Iron ore futures fell below CNY 760 per ton, reaching their lowest level in nearly two months as abundant global supply coincided with seasonally subdued demand in China. Demand from China’s steel sector weakened earlier than usual this year, pressured by persistent rainfall and the premature arrival of summer heat, which slowed construction activity. At the same time, shrinking profit margins left steelmakers less willing to build inventories of the steelmaking raw material. On the supply side, industry data showed shipments from Australia and Brazil remained close to a two-year high, while iron ore stockpiles at Chinese ports continued to stay elevated. Meanwhile, China Mineral Resources Group reportedly advised some domestic steel producers not to hold discussions with Fortescue regarding a new iron ore product, fueling speculation that a potential purchasing restriction may be under consideration.

Iron ore futures fell to around CNY 770 per ton, hitting seven-week lows as abundant global supplies continued to outweigh weakening demand. Industry data showed that shipments from Australia and Brazil remained near a two-year high, while iron ore inventories at Chinese ports stayed elevated, reinforcing concerns about oversupply. On the demand side, recent figures indicated that blast furnace utilization rates in China were steady, while steel mill profitability have declined, pointing to softer industry conditions. Adding to the pressure, the steel market entered its traditional seasonal slowdown earlier than usual this year, as persistent rainfall and an early onset of summer heat curtailed outdoor construction activity, weakening demand for steel products. Meanwhile, a fatal accident at a coal mine in China's Shanxi province is expected to disrupt near-term production, potentially raising input costs for steelmakers, power producers, and chemical manufacturers.