Iron Ore Slips as Global Shipments Rise

Iron ore futures declined to around CNY 711 per ton, resuming their downward trend after data showed global shipments jumped 14.18% to 156.6 million metric tons in July, with Australia and Brazil accounting for much of the increase. Brazil is also entering its peak export season this quarter, while Australian shipments are expected to gradually rebound after a relatively weak start to the new fiscal year. Meanwhile, China imported 108.086 million tons of iron ore and concentrates in July, down 4.09% from June but 3.5% higher than a year earlier. Data released over the weekend also showed consumer and producer inflation in top consumer China slowed in July, pointing to persistently weak domestic demand. Elsewhere, traders monitored an expanding strike at BHP’s Port Hedland export operations in Western Australia, raising concerns over potential supply disruptions.

Iron ore futures climbed above CNY 715 per ton, recovering from 15-month lows as renewed concerns over potential supply disruptions resurfaced. A two-day strike is scheduled at BHP’s Port Hedland operations in Western Australia this weekend, despite progress in negotiations between the mining company and labor unions. The industrial action is expected to delay up to 16 iron ore shipments during the two-day period. BHP exports roughly $80 million worth of iron ore each day through Port Hedland, the world’s largest iron ore export terminal. Meanwhile, demand-side fundamentals remained weak, with a prolonged downturn in steel demand and deteriorating steel margins in top consumer China continuing to pressure the market. Hot metal production has fallen for several consecutive weeks as steel mills scale back output, while sluggish steel consumption has further reduced appetite for raw material purchases.

Iron ore futures slipped toward CNY 700 per ton in early August, falling to their lowest level since May 2025 as the lack of forceful policy support in top consumer China added to concerns over a structural downturn in steel demand. The Politburo recently stopped short of announcing major new stimulus measures, instead emphasizing the implementation of existing fiscal policies to support the slowing economy. Analysts said only targeted measures focused on infrastructure spending and selective industrial support are likely to provide meaningful relief for the market. Chinese steel margins have also continued to weaken, while hot metal output extended its decline as construction activity fell to its lowest level since the start of the pandemic. Meanwhile, private data showed China's manufacturing activity slowed to a four-month low in July as output and new orders expanded at a weaker pace, further weighing on the demand outlook.