Iron ore prices bottomed out and rebounded this week, while the weekly average edged down MoM. On Monday, weighed by last week’s bearish sentiment, the most-traded contract I2609 extended its decline and led losses across ferrous metals, hitting an intraday low of 692.5 yuan/mt, a new low for the year. However, as sentiment was released, short positions took profits and exited; in addition, news around long-term contract negotiations and a BHP port workers’ strike helped iron ore prices bottom out. That said, iron ore fundamentals remained weak, with hot metal production falling rather than rising this week. After Tangshan’s environmental protection-driven production restrictions ended, blast furnaces under maintenance resumed production one after another, but end-use demand weakened further; steel mills faced sluggish shipments and inventories continued to build. Some loss-making steel mills increased blast furnace maintenance, weighing on hot metal output. Overall iron ore demand declined, limiting upside room for ore prices. Port spot cargoes were relatively resilient, especially mainstream low-grade and high-grade ore. With SSF port departures constrained and short-term supply of Ukrainian concentrates tightening, product premiums were supported, providing some downside support for ore prices.
Chart: MMI 61% Port Spot Index
Source: SMM
China’s iron ore concentrates market prices fell notably this week. By region, prices in Tangshan, Qian’an, and Qianxi in Hebei were cut by 15-20 yuan/mt; Liaoxi areas including Chaoyang, Beipiao, and Jianping edged down 5-10 yuan/mt; east China fell 5-10 yuan/mt.
The current dry-basis, tax-included EXW price for 66-grade iron ore concentrates in Tangshan, Hebei was quoted at 950-960 yuan/mt. As steel mills were generally loss-making, their desire to bargain down prices was strong; meanwhile, after holding prices firm for a long time, local concentrates saw their cost-effectiveness continue to weaken. In addition, with some recovery-driven growth in concentrates supply from the Chengde area recently, sentiment among mines and beneficiation plants to hold prices firm loosened. Mines and beneficiation plants in other regions mostly maintained normal production as planned. Demand side, under loss pressure, steel mills mainly pushed for lower procurement prices. Overall, domestic concentrates prices showed a downward trend this week.
Chart: The Price Spread Between Imported and Domestic Ore Widened First and Then Narrowed This Week; It Is Expected to Narrow Next Week
Outlook for Next Week
Imported ore: Looking ahead to next week, iron ore prices may consolidate with a pattern of falling first and then rising, with the bottom gradually lifting. Bullish and bearish factors will intertwine, and the market tug-of-war is set to intensify. On the support side, potential supply-side disruptions still have room to ferment: the union at BHP’s Port Hedland planned to launch a subsequent 24-hour strike escalation on August 9, and port operations face the risk of phased interruptions, which may disrupt the short-term shipment pace; meanwhile, Rio Tinto’s long-term contract is set to expire in August, and subsequent negotiation progress has also entered the market’s observation window, lifting the uncertainty premium on the supply side. In terms of liquidity, the central bank conducted a 500 billion yuan three-month outright reverse repo operation on August 5, releasing a signal of marginal easing that provided some support to market sentiment. Additionally, premiums for pellets and high-grade ore strengthened, with structural demand support persisting. However, constraining factors cannot be overlooked : next week, typhoon weather will limit end-user construction conditions, and demand will weaken further; inventory pressure from steel products at steel mills continues to build, amplifying wait-and-see sentiment on the procurement side and keeping restocking willingness subdued. According to SMM calculations of the impact from blast furnace maintenance, the daily average hot metal production of steel mills will continue its downward trend next week, with demand-side pressure gradually escalating. Port inventory faces the possibility of further accumulation, capping the upside room for ore prices. On balance, ore prices are expected to consolidate next week. News-driven disruptions may spur periodic price upticks, but constrained by a bearish fundamental landscape, the rebound height is likely to be limited. Subsequent recommendations focus on: the progress of the BHP Port Hedland strike and the conclusion of Rio Tinto’s long-term contract negotiations, as these factors may serve as significant catalysts for near-term price direction .
Domestic Ore: Looking ahead to next week, some ore processing plants are expected to resume production, potentially easing the shortage of ore concentrates resources in stages; on the demand side, hot metal production of steel mill blast furnaces may decline further. Overall, domestic iron ore concentrate prices still face downward pressure to edge down.
![[Domestic Iron Ore Mine Brief Comment] Iron ore concentrate prices in the Liaodong region may consolidate on a subdued note](https://imgqn.smm.cn/usercenter/HbWNv20251217171718.jpg)
![[SMM Weekly Summary] Grain-Oriented Base Prices Unchanged, Market Wait-and-See Sentiment Prevails, Price Cuts Still Possible Next Week](https://imgqn.smm.cn/usercenter/fvyjO20251217171715.jpg)
