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| Iron Ore Prices |
Iron Ore Prices Surge to Two-Month Highs in Early July
Iron ore prices saw a significant recovery in early July, surpassing $100 per ton. During the week of June 30 to July 4, September iron ore futures on the Dalian Commodity Exchange (DCE) jumped 2.3%, reaching $102.2 per ton, the highest level since early May. Meanwhile, August contracts on the Singapore Exchange rose by 1.6%, reaching $96.15 per ton.
This price surge was driven by a combination of fundamental and speculative factors. A temporary decline in sea shipments, combined with active purchases from traders who anticipated new stimulus measures from China, helped boost the market. Additionally, announcements from China’s Central Financial and Economic Commission about plans to combat excess steel capacity and ineffective competition supported a positive outlook for iron ore demand.
Market Sentiment and Price Fluctuations
Despite the recent price gains, the market sentiment remains cautious. Early in the week, iron ore prices faced slight declines due to news of potential steel production restrictions in key Chinese regions such as Shanxi and Tangshan, which are integral to the Chinese metallurgical industry. While the scale of these restrictions remained unconfirmed, the market reacted cautiously to the news, causing temporary price pressure.
The spot market showed signs of activity, though it softened towards the end of the week. Analysts attribute this decline to the fading impact of political news and the expectations of higher port stock levels due to the completion of quarterly shipments. These dynamics suggest that while iron ore prices could remain steady, there is a degree of uncertainty regarding short-term price movements.
Short-Term and Medium-Term Price Outlook
In the short term, iron ore prices are expected to stay within the range of $95 to $100 per ton, assuming that high pig iron production levels in China are maintained. However, medium-term risks loom on the horizon. Analysts point to seasonal weaknesses in construction demand and the uncertainty surrounding government support policies as potential challenges for the market.
Moody’s forecasts that iron ore prices will remain within the range of $80 to $100 per ton over the next 12 to 18 months. This outlook reflects weak demand from China and an abundant supply of iron ore in the global market. Similarly, analysts at BMI Country Risk and Industry Research have adjusted their forecast for the average annual price in 2025 to $100 per ton, acknowledging the challenges posed by weaker demand.
ScrapInsight Commentary
The recent recovery in iron ore prices, driven by China’s stimulus expectations and production control measures, signals a positive short-term outlook. However, risks related to seasonal demand and ongoing uncertainties about Chinese economic support could pressure prices in the medium term.
