The price of iron ore has decreased to 710 yuan per ton, experiencing a downward trend for the fourth consecutive day. This price drop is due to a significant decline in profitability in Chinese steel mills, and it seems that the demand outlook for this key material in the steel industry has been affected.
Profitability of Steel Mills
According to industry data, the profitability of steel mills in China has decreased to 7.79 percent in the past week, which is a significant decline compared to previous weeks. This decrease in profitability is due to high coke prices and other production costs, which have put more pressure on the mills.
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Implications for the Iron Ore Market
The decrease in iron ore demand due to declining profitability could lead to further price reductions. Given the current state of the steel industry, it is expected that iron ore producers will seek solutions to reduce costs and maintain profitability. This situation could lead to greater fluctuations in the iron ore market, affecting the dynamics of the steel industry.
On the other hand, the decrease in iron ore prices may provide opportunities for buyers to act in purchasing this raw material. However, instability in the steel market and price fluctuations could harm the balance of supply and demand.
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