Iron Ore Bulls Test Their Nerve As China’s Steel Hangover Returns

Key Points

• Benchmark 62% Fe prices have slipped from recent highs above 110 $/t, with SGX futures back near 102–103 $/t.
• Strong Chinese imports contrast with weakening steel demand and rising exports, reinforcing a medium-term surplus narrative.
• Technicals show a pullback inside a still-intact uptrend, with key support around 105 $/t and resistance near 110–112 $/t.

Iron ore has started the week on the defensive. The 62% Fe benchmark that defines prices for fines delivered into China now trades in the low 100s on Singapore’s exchange, after flirting with 110–113 $/t only days ago.

Spot indices for cargoes into Qingdao still sit in the mid-105s to high-107s, but momentum has clearly faded. Over the past seven days, futures staged a mini-rally as traders bet on targeted Chinese stimulus and short-term restocking.

Dalian contracts briefly reclaimed the 800 yuan line, and Singapore followed, helped by mills dipping into the spot market as inventories ran low.

By Friday, however, the tone had turned. Imported prices and portside sales lost steam, volumes thinned and benchmark contracts slipped back toward 103 $/t.

The real test arrived overnight with fresh trade and industry data. China’s November iron ore imports jumped 8.5% year-on-year to more than 110 million tonnes, keeping the country on course for record annual volumes.

Iron Ore Enters a Soft Surplus Market

Yet steel demand is heading the other way: global industry officials now expect Chinese consumption to fall this year and next, while exports surge toward record highs.

Overcapacity that years of planning and subsidies failed to resolve is being disciplined instead by prices, shrinking margins and production cuts.

On the supply side, Brazilian shipments are rising into year-end and new volumes from projects such as Guinea’s Simandou loom on the horizon.

Large producers talk confidently about long-term demand, but major banks describe the market as moving into “large surplus” and see prices drifting closer to cash-cost levels over time.

Technically, the picture is nuanced rather than dramatic. Weekly and daily charts still show a gentle uptrend, with prices above key moving averages but capped by heavy resistance around 110–112 $/t.

The four-hour chart, by contrast, reveals a sharp short-term correction, with momentum gauges near oversold territory and crucial support clustered around 105–106 $/t.

Barring a shock policy move from Beijing, iron ore looks set to oscillate in a broad 100–110 $/t range, where market forces rather than political slogans decide which producers thrive.