Iron ore headed for a seventh weekly loss — the worst run since 2022 — as demand weakened seasonally and mill margins narrowed.
Futures for the steelmaking ingredient fell to $96.95 a ton in Singapore on Friday, the lowest intraday level since February. For the week, prices have declined 1.5%, with contracts on track for a second monthly drop.
The commodity has struggled in recent weeks on concerns over seasonally weaker demand, rising seaborne supplies, and still-elevated Chinese port inventories. In addition, lower fuel costs following the interim US-Iran peace deal in the Middle East have also kept the market under pressure.
“Miners are likely to ramp up volumes during the final week of the month to meet quarterly guidance targets,” said Sushmita Vazirani, iron ore analyst at Kpler, referring to Australian suppliers. “Soft demand will cap prices.”
In addition, “a key supply monitorable for July is the BHP labor situation,” Vazirani said, referring to ongoing talks between unions at Port Hedand and BHP Group over pay and conditions.
Port Hedland is the world’s largest bulk-export terminal. Monthly flows of iron ore through the complex typically peak in June, with the record volume set in that month last year at 54.6 million tons.
In China, meanwhile, holdings of iron ore at ports rose to 160 million tons this week, according to data from Shanghai SteelHome E-Commerce Co. That’s a record for this time of year. The country is the biggest importer.
Chinese steelmakers are also facing renewed margin pressure. Profitability among surveyed mills fell to about 51%, down 4.8 percentage points on-week and 8.2 percentage points from a year earlier, according to Mysteel.
The squeeze follows a fatal coal-mining accident in Shanxi last month, which has pushed up coke prices. Higher costs are encouraging mills to use more medium-high grade ore to improve efficiency, according to Mysteel analyst Steven Yu.
Futures were 0.4% lower at $97.15 a ton at 10:40 a.m. in Singapore. In China, iron ore in Dalian and steel in Shanghai also declined.
Written by: Katharine Gemmell @Bloomberg
The post “Iron Ore Set for Seventh Straight Weekly Loss as Market Softens” first appeared on Bloomberg