[SMM Iron Ore] Spot gains lift import margins back into profit, though cost pressure lingers

Published: Sep 9, 2026 10:12

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The average imported iron ore margin recovered from minus 0.34 yuan/mt to 6.22 yuan/mt this period, supported by spot prices tracking the firmer tone in futures.

Sustained gains in raw material prices have lifted production costs at steel mills and kept margins under pressure, prompting those with heavier losses to step up maintenance and trimming rigid demand for iron ore. SMM survey data showed hot metal output lost to blast furnace maintenance came to 1.3834 million mt this week, up 23,600 mt from the previous week, leaving overall iron ore demand weaker at the margin.

On the supply side, however, tight vessel availability and higher diesel costs have kept international dry bulk freight rates climbing, lending cost support to iron ore prices. Strong market expectations for the traditional peak season in September and October have also encouraged funds to push futures higher. Iron ore prices may therefore decouple from fundamentals for a time, holding a firm tone on sentiment in the near term. Imported margins, however, could come under renewed pressure should spot gains fail to keep pace with rising costs.

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