Iron Ore Prices Dip Amid Tight Supply and Cautious Demand from China

Iron ore futures for 62% Fe fines delivered to China slightly declined to USD 99.50 per tonne on July 25, reflecting a 0.51% drop.

This modest downturn followed a brief overnight rally reaching a high of USD 100.09. Tightening global supply remains the key factor supporting prices near the critical USD 100 resistance level.

Australian and Brazilian iron ore shipments lag significantly behind last years figures. Portside inventories in China have also fallen to their lowest in twelve months, now around 131.9 million tonnes.

These low stocks limit the downside price movement despite limited demand growth. The broader economic climate continues influencing market caution.

Chinese steel production fell approximately 3% in the first half of 2025, aligning closely with reduced iron ore imports. Although China signals intentions of structural reforms to manage steel overcapacity, the short-term impact on ore demand remains modest.

Technically, the iron ore price faces a strong resistance level at USD 100. Analysis using common indicators reveals weakening momentum on shorter timeframes.

The 4-hour chart displays a declining Relative Strength Index (RSI), dropping from around 63 to 51, signaling decreasing buyer interest. The Moving Average Convergence Divergence (MACD) indicator shows a contracting histogram, reinforcing the notion of fading bullish strength.

Daily charts also highlight iron ores struggle around the USD 100 threshold. Prices remain at the upper band of their recent trading range (USD 95-100.60). Bollinger Bands indicate subdued volatility, pointing toward likely price consolidation or mild correction.

Market participants have kept open interest stable at approximately 413500 contracts, with daily volume around 1270 contracts, signifying limited speculative interest.

Global liquidity, represented by the NDQ index (yellow line), has risen slightly. However, it has not significantly translated into higher iron ore prices, indicating persistent cautiousness.

Overall, iron ore futures currently reflect a market caught between tight supply and cautious demand. Prices may test lower support levels near USD 95-98 if trading volumes remain subdued.

Traders are closely watching Chinese policy signals and fresh inventory data, which could dictate near-term market direction.

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