Iron Ore Falls on Demand Worries

Iron ore futures declined toward CNY 700 per ton, approaching 14-month lows as weak profitability among Chinese steelmakers continues to constrain the potential for a meaningful recovery in ore demand. Recent data also showed China imported 108.086 million tons of iron ore and concentrates in July, down 4.09% from June but still 3.5% higher than a year earlier. Meanwhile, slower consumer and producer inflation in China last month pointed to persistent weakness in domestic demand. On the supply side, however, tightening shipments continued to offer some support to prices. Industry data showed global iron ore shipments fell by 1.38 million tons in the week through August 9 to around 32 million tons, while volumes arriving at Chinese ports dropped by 13.1 million tons to 18.9 million tons.

Iron ore futures climbed above CNY 720 per ton, reaching near two-week highs as signs of tightening near-term supply and possible disruptions supported prices. Industry data showed global iron ore shipments declined by 1.38 million tons in the week through August 9 to around 32 million tons, while shipments arriving at Chinese ports dropped by 13.1 million tons to 18.9 million tons. Supply concerns also increased after more workers joined a strike at BHP’s Port Hedland iron ore export hub in Western Australia, although vessel loading operations have continued. Meanwhile, China imported 108.086 million tons of iron ore and concentrates in July, down 4.09% from June but up 3.5% from a year earlier, according to recent data. Figures released over the weekend also showed China’s consumer and producer inflation slowed in July, highlighting continued weakness in domestic demand.

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.