The benchmark November contract on the Singapore Exchange traded around $90.60 a tonne on Monday, October 26, after falling below $90 earlier this month. The most-traded contract on China’s Dalian Commodity Exchange edged down 0.07 per cent to 670.5 yuan a tonne during early trading.
The market had reached its weakest level since September 2024 on October 15, when Singapore futures touched approximately $89.75 a tonne. Prices subsequently recovered modestly, making the latest trading a continuation of the downturn rather than a fresh two-year low.
Weak profitability at Chinese steelworks has reduced their appetite for raw materials. Average daily hot metal production, a closely watched measure of blast-furnace activity and iron ore consumption, declined 0.5 per cent from the previous week to 2.32 million tonnes as of October 22, according to industry consultancy Mysteel. That was the lowest reading since late March.
Steel producers have faced subdued orders from construction and manufacturing customers while input costs have remained comparatively resilient. China’s prolonged property downturn continues to restrict demand for reinforcing steel, limiting the usual seasonal improvement in consumption and encouraging mills to manage inventories cautiously.
Supply indicators have added to the downward pressure. Industry data compiled by Shanghai Metals Market showed global iron ore shipments rising 2.8 per cent week on week to 33.45 million tonnes in the week ending October 23. Shipments destined for China increased 9.5 per cent to 22.75 million tonnes.
Arrivals at Chinese ports rose 12.5 per cent to 27.61 million tonnes over the same period, suggesting that additional seaborne material was reaching buyers even as steel production weakened. Stronger arrivals can weigh on spot prices when mills are reluctant to rebuild their raw material stocks.
China’s iron ore imports nevertheless increased 4.1 per cent from a year earlier to 954.97 million tonnes during the first nine months of 2026. The higher volume underscores the distinction between substantial import requirements and the weaker prices generated when available supplies outpace immediate steelmaking demand.
The supply outlook is also changing beyond established exporters. The Simandou project in Guinea is expected to increase shipments, adding another source of high-grade ore to a market already served by major producers in Australia and Brazil. Analysts at Zhengxin Futures have identified the project’s expansion, weaker downstream demand and falling freight rates as factors weighing on futures.
Australia’s Department of Industry, Science and Resources said in its September resources and energy outlook that stronger exporter shipments, elevated Chinese port inventories and low steel margins were contributing to a well-supplied seaborne market. It expects iron ore prices to decline as global supply expands and demand softens.
The department projected Australia’s iron ore export earnings would decrease from A$107 billion in 2026–27 to A$96 billion in 2027–28, measured in constant 2026–27 prices. The forecast reflects the importance of price movements to export revenues even where shipment volumes remain substantial.
Market participants also expect fourth-quarter trading to face pressure from ample seaborne supply and voluntary production cuts at steel mills. Reduced margins have prompted producers to curb output, while weaker demand has narrowed the incentive to purchase additional ore ahead of immediate requirements.
The price weakness has changed decisions across the steel supply chain. Mills facing uncertain orders can draw down existing stocks instead of committing to larger cargoes, leaving traders more exposed to fluctuations in port inventories and shipping schedules. The effect is visible when arrivals rise at the same time as blast-furnace production slows. Although stronger imports may suggest healthy demand, the relationship is not automatic: cargoes ordered earlier can arrive after market conditions have deteriorated, increasing pressure on storage and transactions.
There are countervailing influences. Expectations of further Chinese stimulus have limited some selling, with investors assessing whether measures to support domestic activity could improve steel consumption. China’s third-quarter economic growth exceeded expectations, although a stronger headline expansion has not yet translated into sustained improvement in construction-related steel demand.
Other steelmaking inputs weakened alongside ore on Monday. Dalian coking coal futures declined 0.6 per cent and coke slipped 0.42 per cent, while Shanghai-traded reinforcing bar, hot-rolled coil and stainless steel contracts also recorded modest losses.
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