Iron ore falls to two-year low on worries about Chinese demand

what happened

Iron ore futures fell on Tuesday to their lowest level in more than two years, as concerns about demand in China, the world's largest consumer, weighed on the market, Reuters reported. The most-traded contract on the Dalian Commodity Exchange lost 1.19% to 662 yuan ($99.25) a ton by 0214 GMT, after dipping to 661.5 yuan, its weakest level since September 24, 2024.

The benchmark November contract on the Singapore Exchange slipped 1.15% to $89.45 a ton by 0204 GMT, after touching $89.3, its lowest since September 23, 2024. Jiang Mengtian, an analyst at Horizon Insights, said prices were being pushed down by softer seasonal steel demand, thin mill margins that curb hot metal production, and expected higher ore supply in the fourth quarter.

Chu Xinli of China Futures said mills were holding back on restocking because port inventories were high and more supply was anticipated, and the weakness spread to raw materials: coking coal fell 2.03% and coke 1.86%. On the Shanghai Futures Exchange, rebar dropped 0.79%, hot-rolled coil 1.28%, wire rod 1.89% and stainless steel 1.51%.

why it matters

Iron ore is a key input for steelmaking, so cheaper ore reduces mill profitability and feeds through to the wider metals complex. Investors will watch Chinese steel output and port stockpiles for signs of whether demand is stabilising. Revenue at iron ore miners is closely tied to these price swings.

market impact

Iron ore and steel: weaker Chinese demand pressures prices and mill margins

tags

instruments