Iron Ore Prices Hit Lows on China Demand Drop

Iron ore prices have fallen to their lowest levels since September 2024, trading around $93-97 per ton amid weakening demand from China, driven by seasonal construction slowdowns and a sharp reduction in steel output. Futures in both Singapore and Dalian continue to decline, with technical indicators signaling a persistent downtrend. China's crude steel output for May 2025 dropped 6.9% year-on-year, and new home prices and factory growth remain subdued, reflecting ongoing macroeconomic headwinds. Port inventories have surged 28% year-on-year to 146.85 million tons, underscoring the oversupply situation even as some Chinese mills maintain resilient blast furnace margins. In India, NMDC's price cuts and expectations of a growing domestic iron ore surplus reinforce the global bearish outlook, with subdued prices anticipated throughout FY26. Despite the challenging market, major producers are maintaining expansion and capital expenditure plans aimed at long-term growth.