China Iron Ore Futures Mark Strongest Upturn Since May Amid Supply Adjustments

Iron ore prices delivered to China rebounded sharply over the past 24 hours, with the SGX TSI 62% Fe CFR China futures contract rising to $94.60 per ton in early July 2, 2025 trading.

This marks a 0.53% gain from the previous session and represents the most decisive upward move since early May, according to official exchange data and trading charts.

The rally follows a period of persistent weakness. On July 1, iron ore prices dropped to $93.41 per ton, reflecting ongoing concerns about China’s sluggish construction and manufacturing sectors.

Chinese economic data show manufacturing activity contracted for a third consecutive month, and property sector indicators remain negative. Port inventories in China have climbed to 136 million tons, well above the five-year average.

Meanwhile, steel mill blast furnace utilization rates have dropped to 82%. These fundamentals put downward pressure on prices, with the market losing nearly 3.5% since the start of the year.

Despite these headwinds, the last 24 hours saw a notable shift. Technical analysis from the 4-hour and daily charts reveals a clear momentum reversal.

The 4-hour chart shows a strong bullish candle, with the Relative Strength Index (RSI) surging to 59.11 from oversold territory, and the MACD histogram turning positive.

Price action broke above short-term moving averages, and volume increased, confirming the move. On the daily chart, a bullish engulfing candle appeared for the first time since May, with the RSI rebounding to 43.00.

The MACD remains negative but shows signs of flattening, and price reclaimed the $94.60 level. Market participants attribute the rebound to short covering and technical buying after the contract found support near $93.00, a level tested earlier in the week.

The bounce also coincided with a 7.4% drop in shipments from Australia and Brazil last week, hinting at some supply-side restraint. However, fundamentals remain fragile.

Demand from China’s construction sector shows no sign of recovery, and inventories remain high. Trading volumes on the SGX and Dalian exchanges increased during the rally, but no significant ETF inflows or outflows were reported.

Analysts caution that while the technical picture has improved, the broader trend remains bearish unless Chinese demand recovers or supply tightens further. The iron ore market’s sharp upward move stands out against a backdrop of weak macroeconomic signals and oversupply.

The technical reversal may offer a short-term reprieve, but the sustainability of the rally depends on whether underlying demand fundamentals improve in the coming weeks.

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.