Iron Ore Prices Edge Higher as Market Waits for China’s Next Move

Singapore’s SGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures traded at $99.15 per metric ton on Wednesday morning, May 7, 2025, according to exchange data.

The price marked a modest gain of 0.41% from the previous session, continuing a cautious rebound after Monday’s dip to $97.41. This upturn followed a volatile start to the week, as traders repositioned ahead of new Chinese economic data expected later this week.

Iron ore prices have slipped nearly 5% since January, reflecting persistent uncertainty over Chinese demand. The market has seen a shift in steel mill buying patterns, with mills now favoring just-in-time purchases over aggressive restocking.

Inventories at Chinese mills have dropped to an average of 28 days’ consumption, down from 35 days in early March. This change has reduced the urgency to buy in bulk, keeping price movements contained.

Supply from major exporters remains steady. Australian Pilbara shipments continue at around 16.5 million tons per week, and Brazilian exports show no significant disruption.

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.

Iron Ore Outlook

Technical analysis shows iron ore futures breaking above short-term moving averages, with the price now testing resistance at $99.65 and support at $98.49. The Relative Strength Index (RSI) sits near 60, indicating neither overbought nor oversold conditions.

The MACD has turned positive, suggesting some short-term momentum, but longer-term indicators remain cautious. Market participants continue to watch the $95.40 support level closely, as a break below could accelerate selling.

The broader context remains dominated by China’s property sector struggles and uncertainty around global steel trade flows. Real estate investment in China fell 10.1% year-on-year in the first nine months of 2024, while new construction starts contracted by 22.2%.

These figures weigh on steel and iron ore demand. Meanwhile, the expiration of tariff suspensions and new trade policies could reshape global flows, adding another layer of unpredictability.

Trading volumes on SGX remain steady, with open interest at 277,590 contracts, signaling ongoing but cautious participation. ETF flows show little movement, reflecting the market’s wait-and-see approach.

Forecasts for iron ore prices diverge: some expect a rebound to $100 per ton, while others see a drift toward $96 or lower by the end of the quarter. The market’s current balance reflects a mix of stable supply, cautious demand, and technical uncertainty.

Traders now look to upcoming Chinese manufacturing and property data for clearer direction. Until then, iron ore prices are likely to remain range-bound, with any decisive move hinging on fresh signals from the world’s largest consumer.

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