Iron Ore Slips on Rising Shipments

Iron ore futures declined toward CNY 670 per ton, remaining close to four-year lows as increasing global supply continued to pressure the market. Industry data showed that shipments from major producers Australia and Brazil climbed 1.3% week-on-week to 27.9 million tons as of November 2, with miners boosting output to meet their quarterly and annual production targets. Meanwhile, demand in China, the world's largest iron ore consumer, remained subdued as steelmakers held back on restocking amid persistently weak profit margins, softer downstream steel demand and elevated inventory levels. Environmental restrictions imposed across several northern Chinese provinces also continued to constrain hot metal production. However, output is expected to rebound once these restrictions are lifted.

Iron ore futures held below CNY 680 per ton, hovering near four-year lows as rising port inventories, subdued steel mill profitability and sluggish demand continued to pressure prices. Industry data showed that iron ore stockpiles at major Chinese ports increased nearly 1% to 153.72 million tons in the latest week, while shipments from producers outside Australia and Brazil remained elevated. Meanwhile, profitability among Chinese steelmakers remained subdued at 11.26%, unchanged from the previous week. Environmental restrictions across several northern Chinese provinces also continued to weigh on hot metal production, although output is expected to recover once the curbs are lifted. Elsewhere, Brazilian mining giant Vale reported a 20% decline in third-quarter core profit, reflecting the impact of lower iron ore prices and persistently high fuel and freight expenses.

Iron ore futures climbed above CNY 680 per ton, recovering from four-year lows amid signs of strengthening demand in top consumer China. Industry data showed that China’s average daily hot metal output, a key indicator of iron ore demand, increased by 3,700 tons to 2.36 million tons, marking a second consecutive weekly gain as blast furnaces resumed operations following maintenance. The operating rate of blast furnaces across surveyed mills also rose by 0.14 percentage points week-on-week to 87.3% as of October 28. Meanwhile, freight rates on both Australia-China and Brazil-China routes continued to rise, providing further support for iron ore prices. However, Chinese steel mills remain unprofitable, and domestic steel demand remains weak. Robust global iron ore production could also constrain further price gains.