Iron Ore Defies China Tariff Fears as Supply, Not Demand, Drives Soft Imports

 Iron Ore

Despite U.S. tariff pressure, iron ore prices and demand from China remain resilient amid temporary supply constraints.

While global concern grows over U.S. tariffs and their potential impact on China, iron ore tells a different story. As the key input for steelmaking, iron ore remains the most China-exposed commodity, yet prices and import volumes show surprising resilience.

Singapore Exchange iron ore contracts closed at $99.35/ton on May 7, rebounding from a seven-month low of $96.20 on May 1. Prices have remained in a narrow band since October 2024, peaking at $110.55 and suggesting stable fundamentals.

Customs data reveals China’s Q1 2025 iron ore imports fell 7.8% year-on-year to 285.31 million tons. However, the dip reflects weather-related supply disruptions in Australia, not a decline in Chinese demand.

Port inventory levels further confirm this: stocks fell to 133.8 million tons by late April, down from 147.5 million tons in mid-February, as steel mills drew on reserves during the Australian export slowdown.

Data provider Kpler estimates April iron ore imports recovered to 101.4 million tons, up from 93.97 million tons in March, pointing to resumed shipments.

Meanwhile, China’s crude steel output hit a 10-month high of 92.84 million tons in March, up 4.6% year-on-year, suggesting robust demand heading into summer.

The takeaway: iron ore’s import softness is driven by disrupted supply rather than weakening demand, contrasting with the wider tariff-driven economic narrative. As mills prepare for peak construction season, imports are expected to stay firm through Q2.