Iron Ore Languishes at Four-Year Lows

Iron ore futures recovered to above CNY 670 a ton after touching a four-year low of CNY 664 on October 27, as the return of steelmaking capacity provided some support despite concerns over rising supply. Hot metal production, a key indicator of iron ore demand, fell by 89,900 tons week-on-week to 1.75 million tons in the week ending October 24, largely due to blast furnace maintenance. Output is expected to decline further before recovering as furnaces resume operations. However, the improvement in production may offer limited support to prices, as steel mills continue to operate at a loss and demand for steel remains weak. On the supply side, iron ore arrivals at Chinese ports are expected to rebound after weather disruptions caused by typhoons along the eastern coast reduced deliveries last week. Although global shipments eased slightly, they remained seasonally high, increasing the risk of port inventories rebuilding and keeping prices under pressure in the near term.

Iron ore futures declined toward CNY 660 per ton, hitting fresh four-year lows amid signs of abundant global supply and a deteriorating demand outlook. China is entering a seasonally weaker period for steel consumption, while elevated oil prices have heightened concerns about the broader global economic outlook. Deteriorating profitability among Chinese steelmakers has further weighed on demand expectations, with industry data showing that the blast furnace operating rate across 247 Chinese steel mills stood at 80% last week, down 4.3 percentage points from the same period a year earlier. On the supply side, shipments from four major iron ore producers, including Rio Tinto Group and BHP Group, are expected to increase by nearly 20 million tons in the fourth quarter, while Guinea’s Simandou mine continues to expand production.

Iron ore futures fell toward CNY 670 per ton on Monday, hovering near four-year lows as weakening profitability among Chinese steel mills dampened demand prospects. Industry data showed that the blast furnace operating rate at 247 Chinese steel mills stood at 80% last week, down 4.3% from the same period a year earlier. Supply conditions also remain ample, supported by elevated iron ore arrivals at Chinese ports and increasing global shipments. Meanwhile, China’s state-backed iron ore buyer recently reached a new supply agreement with Rio Tinto, easing concerns over raw material availability. The China Mineral Resources Group reportedly informed several steel mills verbally of the deal last week, although specific terms were not disclosed. Previously, CMRG had instructed some steelmakers to suspend negotiations with Rio Tinto over shipments scheduled from September.