SMM, July 30:
Iron ore futures continued to drift lower during the day session on July 30, closing down again and fully reflecting the dual bearish pressure from macro headwinds and fundamentals. Earlier macro tailwind expectations gradually fizzled out, and combined with a sharp increase in supply and persistently weak downstream demand, iron ore futures faced a double blow. By the close of the day session on July 30, iron ore extended its losing streak to a fifth consecutive trading day, falling 3.31% to 715 yuan/mt, with an intraday low of 712.5 yuan/mt—a new low since early July 2025.
Fundamentals
Supply: Weather disruptions outside China fade, port arrivals surge, and supply pressure climbs significantly
Chart: SMM 35-port Inventory (10kt)
Data Source: SMM
In terms of supply: According to SMM shipping data, total global iron ore shipments tracked by SMM reached 27.82 million mt last week, down 10% WoW; cumulative shipments were up 1% YoY. Shipments from Australia and Brazil both edged down slightly, while shipments from non-mainstream countries fell WoW, though shipments from India and Peru rebounded notably. Meanwhile, total China iron ore port arrivals tracked by SMM surged to 30.32 million mt last week, up 54% WoW, with cumulative arrivals up 5% YoY. As weather disruptions outside China gradually recede, port arrivals rebounded markedly, and the supply growth weighed on ore prices.
Demand: Off-season compounded by environmental protection-driven production restrictions, hot metal output continues to pull back, and raw material demand support weakens
In terms of demand: Environmental protection-driven production restrictions and the traditional off-season effect pushed China’s hot metal output down to a low for the year, and iron ore continued to face pressure from downstream demand. According to an SMM survey, on July 29 the operating rate of blast furnaces at 242 steel mills stood at 88.93%, down 0.47 percentage point WoW. Average daily hot metal output at the sampled mills was 2.4087 million mt, down 16,000 mt WoW. The decline in hot metal output this week was mainly due to disruptions from environmental inspections, especially in the Tangshan area of Hebei, where mills arranged concentrated short-term maintenance, leading to a temporary output reduction.
Inventory: Port inventories saw a buildup, with a clear pattern of strong supply and weak demand
Chart: SMM Ten-Port Inventory Data (10kt)
Data Source: SMM
In terms of inventory: As of July 30, according to SMM monitoring data, total inventories at the ten ports tracked by SMM stood at 106.92 million mt, up 1.29 million mt WoW, with coarse fines, concentrate, lump ore, and pellets all showing a slight inventory buildup. The inventory buildup at ports further confirmed the current pattern of strong supply and weak demand, continuing to suppress iron ore market prices.
Market outlook
for iron ore, in the short term, supply-side growth pressure continues to be released, and the pattern of weak demand during the traditional off-season for downstream end-users is unlikely to reverse quickly. Before significant improvement in construction activity and finished steel consumption, iron ore prices will overall remain in the doldrums. Subsequently, focus will be on tracking the strength and rollout pace of end-use demand recovery during the traditional September-October peak season.
From a medium and long-term perspective, the iron ore market in H2 2026 will continue to see an oversupply pattern, with fundamentals weakening QoQ and ore prices still having the possibility of hitting bottom further. However, the escalating US-Iran conflict has pushed up energy costs, driving up ocean shipping costs, which will provide bottom support for iron ore prices. Overall, barring any significant macro or fundamental positive news, the oversupplied fundamentals will prevent iron ore from staging a trend reversal rebound, while the downside room is limited, keeping prices in a pattern of consolidating on a subdued note with insufficient upward momentum and cost-based downside support.
Institutional Views
A research report from Everbright Futures showed: Australian miner MinRes released its Q2 2026 operational report. The report showed that iron ore production at the Onslow Iron project in Q2 reached 8.754 million mt, up 12% QoQ and 42% YoY; shipments reached 9.596 million mt, up 33% QoQ and 66% YoY, setting a quarterly shipment record. Iron ore shipments from the Pilbara Hub project in Q2 were 2.701 million mt, up 31% QoQ and 7% YoY. For FY2026, MinRes's attributable iron ore shipments reached 29.543 million mt, setting an annual record. Combined with Rio Tinto and Vale's quarterly reports having previously confirmed high production and sales from major mines, the medium-term supply ample pattern was further cemented. On the demand side, hot metal output continued its decline, and low steel mill profits dampened raw material purchase willingness. Ore prices are expected to continue to consolidate on a subdued note in the short term.
SDIC Futures stated: Supply side, global shipments pulled back MoM and were weaker than the same period last year. BHP and workers have yet to reach an agreement on pay raises, but currently there are no further strike plans; future attention remains on negotiation progress. China's port arrivals fell below the year-to-date average but were still stronger than the same period last year; port inventories stabilized and rebounded after weather disruptions ended. Demand side, apparent steel demand in the off-season was weak; the proportion of profitable steel mills continued to decline from low levels, leading to more production cuts; hot metal output continued to fall, and iron ore demand faced marginal downside pressure. External geopolitical conflicts persist, keeping oil prices consolidating at a relatively high level and providing some cost support for futures. SDIC Futures expects iron ore futures to consolidate.
Yide Futures believes: Hot metal production is gradually declining, while the seasonal decline in supply is not pronounced, resulting in insufficient marginal supply-demand improvement and continued high inventory pressure. Although 730-710 offers some support, end-use demand has not yet emerged from the off-season, and there is insufficient momentum for a rebound.
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