Iron Ore Prices Steady Near $100 as Chinese Demand Concerns Persist

Iron ore futures edged higher in early trading Monday, with the benchmark Iron Ore 62% Fe, CFR China (TSI) Index reaching $99.70 per metric ton, up 0.15% from Friday’s close.

The modest gains continue a cautious recovery pattern that began last week after prices touched a weekly low of $97.41 on May 5. The recent price stabilization occurs against a backdrop of persistent demand concerns from China.

Real estate investment in the world’s largest iron ore consumer has fallen 10.1% year-on-year, while new construction starts contracted by 22.2%. Chinese steel mills have shifted to just-in-time purchasing strategies, reducing their average inventory levels to 28 days from 35 days in early March.

Technical indicators present a mixed picture for iron ore. The relative strength index (RSI) sits near 60, indicating neither overbought nor oversold conditions. MACD has turned positive, suggesting some short-term upward momentum.

Traders watch the critical support level at $95.40, as a break below could trigger accelerated selling pressure. Supply from major producers remains stable.

Australian Pilbara shipments continue at approximately 16.5 million tons weekly, while Brazilian exports show no significant disruptions. Combined inventories at Chinese ports stand at 138 million metric tons, well above levels that might trigger panic buying.

China’s steel demand adds further pressure to the market outlook. The state-backed China Metallurgical Industry Planning and Research Institute forecasts a 1.5% decline in Chinese steel demand for 2025.

Market sources expect China may cut its annual crude steel production by up to 5% this year, reflecting both government policy and economic challenges. The looming Simandou iron ore project in Guinea threatens to reshape market dynamics.

Production from this massive high-grade deposit is expected to begin later this year, with output potentially exceeding 120 million tonnes annually by 2028. This supply surge could create significant downward pressure on prices.

Iron ore has decreased 4.88% since the beginning of 2025, reflecting the challenging market conditions. Analysts remain cautious about future price movements.

Trading Economics expects prices to reach $96.63 by the end of this quarter and decline to $91.09 within 12 months. The broader commodities landscape shows diverging paths.

Gold trades at $3,270.99, down 1.60% today, while copper sits at $4.64, up 0.73%. Steel prices have fallen to 3,049 CNY, down 0.62%, reflecting weakened demand throughout the metals complex.

Trading volumes remain steady with open interest at 277,590 contracts, indicating ongoing but cautious market participation. Physical market participants maintain short positions, while money managers have switched from net short to net long positions over the past six weeks.

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