Iron Ore Holds Near Lows as Technical Rebound Falters Amid Persistent Surplus

The Singapore Exchange’s TSI Iron Ore CFR China (62% Fe Fines) Index hovered at $96.40 per tonne on June 6, 2025, reflecting a market struggling to find direction after a failed breakout attempt.

Official data from the exchange and trading platforms show the contract briefly touched $96.75 in the previous session before sellers regained control.

The price remains well below the 50- and 200-period moving averages on the 4-hour chart, as shown in the attached TradingView chart, and continues to trade beneath the Ichimoku cloud, signaling ongoing bearish pressure.

Technical indicators confirm this weakness. The 9- and 20-period moving averages now sit just below the price, offering minor short-term support. However, the 50-period moving average acts as a strong resistance level, and the price remains far from the 200-period average.

The Bollinger Bands have narrowed, reflecting reduced volatility after last week’s sharp decline, while the Relative Strength Index (RSI) hovers in neutral territory, failing to signal a reversal.

The Moving Average Convergence Divergence (MACD) indicator remains negative, with no clear sign of bullish momentum. Volumes on the SGX and Dalian Commodity Exchange picked up slightly during the June 5 rebound.

However, traders described the move as a technical correction rather than a shift in fundamentals. A Beijing-based mill source told Fastmarkets that the rebound followed days of decline and that the underlying market structure remains unchanged.

Iron Ore Market Outlook

The derivatives market saw speculative interest in 62% Fe Pilbara Blend fines due to limited short-term supply, but this did not translate into sustained buying.

Fundamental factors continue to weigh on the market. UBS analysts forecast a mild surplus for 2025, with a 20 million tonne increase in supply and a similar reduction in demand.

Iron ore inventories at Chinese ports have declined for four consecutive weeks, reaching around 145 million tonnes, but this has not offset robust shipments from major producers in Australia and Brazil.

Mills in China have shifted to lower-grade ores to manage costs, further dampening demand for higher-grade fines. Macroeconomic data reinforce the cautious tone.

China’s steel sector remains sluggish despite policy support, and manufacturing activity has yet to show convincing improvement. The global outlook points to a persistent surplus, with new supply expected from projects in Australia, West Africa, and Brazil in the coming years.

UBS projects average iron ore prices at $100 per tonne for 2025, with a gradual decline to $95 in 2026. The market’s technical and fundamental backdrop suggests that the failed breakout above $96.75 lacked conviction, and the price remains vulnerable to further downside.

Without a clear catalyst, iron ore is likely to trade in a tight range, with resistance at $97.35 and support at $94.75. The story behind the figures is one of a market searching for stability amid persistent oversupply and muted demand, with technical signals offering little hope for a sustained recovery.

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