Iron Ore Holds Steady at $100.35: Chinese Steel Resilience Offsets Property Concerns

The SGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures is trading at $100.35 per metric ton this morning, showing no change (0.00%) from the previous close.

The benchmark has maintained its position above the psychologically important $100 mark, demonstrating resilience despite ongoing market uncertainties. Iron ore prices have shown remarkable stability over the past 24 hours after experiencing a modest gain yesterday.

On Monday, May 19, the market closed at $100.15 per metric ton, following a period of cautious recovery that began last week. This morning’s steady price action continues the consolidation pattern that has characterized recent trading sessions.

The current price reflects a year-to-date decline of approximately 3.41% since the beginning of 2025, though iron ore has significantly outperformed several other commodities in the metals complex, particularly lithium, which has seen a dramatic 73.4% decline over the same period.

Market Drivers

Chinese Demand Dynamics

Despite persistent concerns about Chinese demand, particularly in the property sector, Chinese steel production has shown surprising resilience:

• Steel production increased 1.1% year-over-year in Q1 2025
• Daily steel output reached 2.8 million tonnes in early May 2025, up from 2.6 million tonnes in early January
• Steel inventories sit at just 11.6 million tonnes – the lowest level for this time of year since 2016

“The steel sector is demonstrating impressive resilience despite property sector headwinds,” notes Daniel Morgan, commodities analyst at UBS. “This resilience is primarily driven by infrastructure spending and manufacturing growth, which are offsetting weakness in construction.”

Supply Constraints

Several supply-side factors have contributed to iron ore’s price stability:

• Severe cyclones disrupted Pilbara exports earlier in 2025, reducing Australian shipments by approximately 15 million tonnes
• Rio Tinto is facing quality issues with its flagship product, with Pilbara Blend fines being downgraded from 61.6% Fe to 60.8% Fe from July to September 2025

Current supply from major producers remains stable, with Australian Pilbara shipments continuing at approximately 16.5 million tons weekly, while Brazilian exports show no significant disruptions.

Inventory Levels

Chinese steel mills have shifted to just-in-time purchasing strategies, reducing their average inventory levels to 28 days from 35 days in early March. This change has reduced the urgency to buy in bulk, keeping price movements contained.

Combined inventories at Chinese ports stand at 138 million metric tons, well above the 135 million ton threshold that could trigger panic buying. This stability in supply and stockpiles has helped limit both downside and upside volatility.

US-China Trade Relations

The easing of US-China trade tensions has significantly improved market sentiment for commodities. The 90-day pause in trade hostilities has reduced reciprocal tariffs from extreme levels (145% and a retaliatory 125%) to more moderate rates of 30% and 10% respectively.

This trade truce has benefited major mining stocks:

• Rio Tinto shares have climbed 14.3% since the announcement
• BHP has gained 11.7% over the same period
• Fortescue Metals Group has surged 16.2%

Technical Analysis

The technical picture for iron ore presents mixed signals:

• The price is currently trading between the 78.6% Fibonacci level (USD 98.85/ton) and the 38.2% level (USD 104.20/ton)
• Key support exists at $95.40, which has held during recent tests, while resistance stands at $104.20
• Moving averages present a mixed picture with short-term MAs suggesting “Buy” while longer-term MAs indicate “Sell”

The current price action places iron ore in a consolidation phase between these technical boundaries. Traders are watching the critical support level at $95.40, as a break below could trigger accelerated selling pressure toward $89.30.

Physical Market Activity

Physical market activity shows selective buying rather than aggressive restocking, with recent transactions including:

• 90,000 tonnes of Newman Fines at $96.30/t
• 170,000 tonnes of PB Fines at $98.05/t

Trading volumes remain steady with open interest at 277,590 contracts, indicating ongoing but cautious market participation. Physical market participants maintain short positions, while money managers have switched from net short to net long positions over the past six weeks.

Related Metals Markets

The broader metals complex shows diverging paths this morning:

• Gold trades at $3,219.45, up 0.49% today
• Silver sits at $32.36, up 0.25%
• Copper is at $4.56, up 0.11%
• Steel prices have fallen to 3,105 CNY, down 0.86%

Silver has been particularly volatile, with prices increasing 12.13% since the beginning of 2025. The silver market is forecast to record another significant deficit for the fifth consecutive year in 2025, with industrial demand expected to hit a new record high.

Market Outlook

Analysts remain divided on iron ore’s future price trajectory:

• Trading Economics expects prices to trade at 98.13 USD/MT by the end of this quarter and decline to 92.50 in 12 months
• UBS maintains a more optimistic $100 average target for 2025
• Commonwealth Bank analyst Vivek Dhar notes: “Iron ore’s support levels have demonstrated remarkable resilience, suggesting a structural floor may exist around the $95/t mark. However, Simandou’s entry to the market could test this floor significantly.”

The looming Simandou iron ore project in Guinea threatens to reshape market dynamics, with production expected to begin later this year and potentially exceeding 120 million tonnes annually by 2028.

As the market moves forward, participants will be closely watching upcoming Chinese manufacturing and property data for clearer direction on iron ore’s price trajectory.

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