Iron ore prices on the futures market reached around 670 yuan per ton, nearing their lowest level in four years. This price decrease is due to increased maintenance of blast furnaces in China and also the abundant global supply of iron ore.
Decrease in Hot Metal Production in China
Industrial data indicates that the forecast for hot metal production losses due to blast furnace maintenance has increased in recent weeks. From October 10 to 16, these losses have risen for the third consecutive week, estimated at over 270,000 tons since late September. This production decrease could lead to reduced supply and increased prices in the future, but currently, the market is under pressure due to ongoing maintenance and weak demand.
Increase in Iron Ore Inventory
While hot metal production is decreasing, iron ore inventory at seven major ports in Australia and Brazil has increased by 1.99 million tons, reaching 12.58 million tons in the week ending October 11. This inventory increase indicates an imbalance in the market and could lead to continued pressure on prices.
Additionally, global extraction capacities are expanding, and producers are increasing their shipments in the fourth quarter of this year to meet seasonal and annual targets. These conditions could lead to continued pressure on prices and further reductions.
In light of these developments, the World Steel Association has predicted that global steel demand will face a 0.1 percent decline in 2026. This downward revision contrasts with a previous forecast of a 0.3 percent growth, attributed to reduced demand in China and disruptions related to political tensions between the United States and Iran.
