Iron Ore Market Holds Steady as Oversupply and Weak Chinese Demand Dominate

Official Singapore Exchange data and TradingView charts confirm that iron ore futures for 62% Fe CFR China traded at $94.70 per ton on June 23, 2025, with prices barely moving from the previous session.

The market stayed in a narrow range between $94.60 and $94.90, reflecting a lack of conviction among traders and subdued volumes. This stability comes as the market continues to confront persistent oversupply.

Demand from China’s steel sector also remains tepid. Chinese port inventories remain elevated, with the latest official figures showing 146.85 million tons, a 28% rise year-on-year.

This high inventory level signals that supply continues to outpace demand, as steel mills in China focus on cost controls and increasingly turn to lower-grade feedstocks.

Supply from major exporters Australia and Brazil remains steady, with no new disruptions reported, and the recent downgrade in Pilbara Blend fines quality by Rio Tinto has not offset the broader demand weakness.

Demand fundamentals remain weak. China’s crude steel output slipped sharply in May compared to the prior year, surprising analysts and aligning with Beijing’s ongoing push to cap steel production.

Iron Ore Market Analysis

Despite some resilience in demand for steelmaking materials, official data show that only about 60% of blast-furnace steel mills in China reported positive margins as of mid-June.

Average daily hot metal output, a key gauge of iron ore demand, held steady at around 2.42 million tons, but this has not translated into stronger spot market activity.

Meanwhile, China’s new home prices continued to fall in May, extending a two-year stagnation and highlighting persistent challenges in the construction sector, a key end-user of steel.

Macroeconomic factors further complicate the outlook. China’s factory output growth hit a six-month low in May, and while retail sales picked up, the overall economic environment remains lackluster.

On the trade front, U.S. tariffs on imported steel products, effective June 23, add another layer of uncertainty for Chinese steel exports and, by extension, iron ore demand.

Technical analysis of the daily chart underscores the market’s bearish bias. Prices remain below the 50-, 100-, and 200-day moving averages, which cluster between $95.61 and $101.53. The Relative Strength Index (RSI) sits at 34.87, close to oversold territory.

The MACD remains negative, though its histogram shows signs of convergence, hinting at possible stabilization. Bollinger Bands reveal that the price continues to hug the lower band, suggesting ongoing downward pressure but also the risk of a technical bounce.

The four-hour chart supports this view, with the RSI at 50.33 and the MACD flat, reflecting consolidation just above key support at $94.70. In summary, iron ore’s price action over the past 24 hours reflects a market caught between persistent oversupply and weak demand.

Traders remain cautious, with technical indicators pointing to a continued downtrend but also signaling that the market is approaching oversold conditions.

Without a clear catalyst from Chinese policy or a shift in global steel demand, iron ore prices are likely to remain under pressure, with any rallies likely to be short-lived.

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