[SMM Iron Ore] Weekly Market Outlook : Iron Ore's Standoff (29 June - 3 July 2026)

The iron ore market is currently locked in a supply-heavy, demand-weak stalemate. While fundamental pressure is pushing for lower prices, strong resistance from high-cost producers is creating a floor, suggesting a range-bound, sideways treading market for the week ahead. Here’s a breakdown of the key factors:

Supply: Global Market Remains Loose

• Arrivals Surge: This week, iron ore arrivals on China port reached 29.33 million tons, a notable 6% increase both week-on-week and year-on-year. Global shipments to China are arriving steadily and in significant volumes.

• Persistent Inventory: Port inventories continue to be a significant drag. SMM data places 35-port stocks at ~148 million tons, while more source reports up to 170 million tons. Despite high volumes, there is little to no progress on destocking.

Demand: Downstream Weakening, Mills Squeezed

• External Competition: Downstream steel demand continues to soften. The China domestic market is facing further pressure from low-priced steel billet imports from Indonesia, which are grabbing market share.

• Profit Squeeze: Steel mills are caught in a vise. Upstream, coal and coke prices remain strong and resilient, while downstream demand is absent, continuously eroding steelmaking profits.

• Production Cuts Expected: Market sentiment is overwhelmingly pessimistic regarding near-term demand. We anticipate both steel mill purchase intent and molten iron production to move lower in tandem. Spot traders report extreme difficulty in securing profitable transactions.

News & Negotiations: Stalled Talks & Tangled Factors

The coal and coke sectors continue to trended upward sentiment from breaking news, supporting strong price expectations. Meanwhile, the outcomes of the recent closed-door meeting between major steel mills and traders are split between two major market narratives.

Price Floor: Resistance from High-Cost Producers

Crucially, the current iron ore price has corrected to a very sensitive level—effectively the cost line for many high-cost mines and a significant psychological support point for traders. Both groups are now actively resisting any further price declines.