Iron Ore Market Holds Firm as Technical Barriers Limit Upside

The latest data from the Singapore Exchange shows the SGX TSI Iron Ore CFR China (62% Fe Fines) Index trading at $95.50 to $95.85 per metric ton early July 7, 2025.

The price reflects a marginal decline from the previous close of $95.89. Volumes on the July contract reached 11,240 lots overnight, indicating steady but not exuberant trading activity.

Market participants observed a day marked by cautious trading. The price action stayed within a narrow band as traders weighed the impact of Beijing’s ongoing supply-side reforms against persistent concerns about oversupply and weak demand from China’s property sector.

The market continues to monitor Chinese steel mill margins, which remain compressed at around 3% EBITDA, well below global averages. Chinese port inventories held steady at approximately 95 million tons, providing a buffer against sudden supply shocks.

The technical picture, based on the most commonly used indicators, shows a market at a crossroads. The four-hour chart reveals that prices briefly broke above the $95 resistance but met selling pressure near the 200-period moving average.

The MACD on this timeframe turned negative, which signals a loss of short-term momentum. The RSI pulled back from overbought levels, now hovering near 50, suggesting a pause in buying enthusiasm.

Bollinger Bands indicate that volatility has contracted, with prices moving closer to the middle band after testing the upper range. On the daily chart, the market remains below the long-term downtrend line.

The MACD remains negative but shows signs of a possible bullish crossover. The RSI has recovered from oversold territory and now sits near 49, reflecting a neutral stance.

Moving averages confirm the broader trend remains bearish, as prices trade below the 200-day average. These technical signals suggest that while the market has stabilized from June’s lows, it needs a decisive move above $97 to signal a true reversal.

Fundamental factors continue to anchor sentiment. Global supply remains ample, with shipments from Australia and Brazil up nearly 2% week-on-week in early June.

Vale’s recent reduction in agglomerates output tightens the pellet market but has not yet shifted the balance for fines. Demand from China, the world’s largest iron ore consumer, remains subdued, especially as the property sector struggles and steel mill profitability lags.

Macroeconomic drivers add another layer of complexity. Beijing’s signals to curb outdated steel capacity have provided some support, but the market waits for concrete policy actions.

International ETF flows into commodities remain positive, but iron ore-specific inflows show no significant spikes. The past 24 hours highlight a market in consolidation.

Traders hold positions above $95, awaiting clear policy signals or a shift in supply-demand fundamentals. Technical resistance near $97 caps the upside, while support at $94 remains firm.

The story behind the numbers is one of caution, with participants unwilling to commit until they see stronger evidence of change.

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