Iron Ore Pressured by Weak Fundamentals

Iron ore futures in China traded around CNY 710 per ton, hovering near one-month lows as weak fundamentals continued to weigh on the market. Supply remained ample, with shipments from top producer Australia rising above 21 million tons week-on-week, contributing to elevated port arrivals. Industry data also showed that iron ore inventories at seven major ports in Australia and Brazil increased by 258,000 tons to 11.95 million tons last week. Meanwhile, Chinese steel mills continued to face widening losses, largely due to elevated coking coal prices as safety inspections and mine suspensions in Shanxi restricted domestic supply. Softer demand from China’s construction and manufacturing sectors has also weighed on purchases of ferrous metals. However, iron ore prices remain supported by expectations that Chinese steel mills will step up restocking ahead of the extended Golden Week holiday in early October.