Iron Ore Prices Stabilize After Weeks of Decline as Market Faces Persistent Headwinds

Iron ore prices for 62% Fe fines delivered to China showed tentative signs of stabilization on June 19, 2025, after weeks of steady declines.

According to Trading Economics and official exchange data, the SGX TSI Iron Ore CFR China Index Futures traded at $94.45 per tonne in the morning session, marking a marginal recovery from the previous day’s close of $94.20.

This modest gain follows a period where prices dropped to their lowest since April, reflecting the market’s ongoing struggle with weak demand and oversupply.

The technical picture, as seen in the attached four-hour and daily charts, highlights a market still under pressure but potentially finding a short-term base. Both charts show prices trading below all major moving averages, with the 50, 100, and 200-period averages acting as resistance.

The Relative Strength Index (RSI) on the four-hour chart has rebounded to 42.29 from oversold conditions, while the daily RSI remains at a deeply subdued 34.09.

The Moving Average Convergence Divergence (MACD) indicator on both timeframes shows negative momentum, though the four-hour chart suggests a possible bullish crossover as selling pressure wanes.

Bollinger Bands on both charts reveal prices hugging the lower bands, indicating persistent downward pressure but also the likelihood of a technical bounce. Market fundamentals continue to weigh on sentiment.

Iron Ore Market Struggles as China’s Steel Demand Weakens

China, the world’s largest iron ore importer, has seen its steel sector contract further. The China Metallurgical Industry Planning and Research Institute forecasts steel demand to fall 1.5 percent in 2025, a slower decline than last year but still a drag on iron ore consumption.

Growth in machinery, automotive, energy, and home appliances offers some support, yet the construction sector’s retreat overshadows these gains. Official figures show steel demand in construction is set to fall another 3.2 percent this year.

Supply remains ample. Global iron ore shipments last week totaled 34.31 million tonnes, up more than two million tonnes month-on-month. Australian and Brazilian exports remain robust, while port inventories in China hover near historic highs.

Recent data from SunSirs indicates that inventories at 45 major Chinese ports reached 138.27 million tonnes, with little sign of significant drawdown as steel mills reduce procurement.

Macroeconomic factors add further uncertainty. Trade tensions resurfaced after announcements of potential new steel import duties, while the seasonal slowdown in Chinese construction activity has dampened buying interest.

Even a brief rally earlier in June, triggered by a surge in coking coal prices and diplomatic optimism, quickly faded as fundamentals reasserted themselves. Volumes on futures exchanges remain moderate, with no significant ETF inflows or outflows reported.

The market’s lack of conviction reflects a consensus that prices will likely remain in the $90-95 range in the near term, barring a major supply disruption or unexpected policy shift in China.

In summary, iron ore prices have found some stability after a relentless decline, but the market remains fragile. Technical indicators suggest a possible short-term bounce, yet the broader trend stays bearish as oversupply and weak Chinese demand continue to dominate the narrative.

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