Iron ore price drops below $100 as global fundamentals remain weak

Iron ore fell below $100 a ton, as demand in China slowed before the Lunar New Year and signs of a well-supplied market stack up.

Futures for 61%-content ore shed as much as 1.3% to $99.35 a ton in Singapore, to head for a fourth weekly drop, the longest losing run since June. The commodity has come under pressure as stockpiles at major Chinese ports and mills climb, and the steel market shows signs of seasonal softening.

“Iron ore’s own supply-demand fundamentals remain weak,” said Steven Yu, a researcher at consultancy Mysteel. Hot-metal output at mills had been slower that expected before the week-long holiday starting mid-February, while restocking activity, which is generally supportive, has ended, he added.

Iron ore prices have weakened as mills in China reduce steel output on an annual basis, while miners in Australia and Brazil boost ore production. In addition to cargoes from established mines, a new project in Guinea, Simandou, will ramp up this year, adding to seaborne supply. Overall, that’s contributed to rising inventories, which have swelled to a multi-year peak.

Port stockpiles in China rose for a 10th week, adding 0.6% to 160 million tons, according to data from a sample of ports by Shanghai SteelHome E-Commerce Co. on Friday. That’s the highest since 2022, and near the record set in 2018. The rising holdings may also reflect the impact of a pricing dispute between miner BHP Group and state buyer China Mineral Resources Group Co.

Futures for March traded 1.2% lower at $99.40 a ton at 3:09 p.m. in Singapore. Iron ore was last below $100 in August, although that was for the then-prevailing 62% content material.

Earlier this week, BMI, a Fitch Solutions company, said iron ore prices were expected to average $95 a ton this year, citing elevated inventories, healthy mine output, and potential steel-output curbs. Goldman Sachs Group Inc. said last month that iron ore may drop once the dispute between BHP and CMRG was solved, and new low-cost supply came online.

On the supply side, Pilbara Ports — which manages major iron-ore terminals in Australia — will have berths cleared at ports including Port Hedland, Dampier and the Ports of Ashburton by 4 p.m. local time, according to a statement on Friday. A storm was developing slightly faster than forecast and gales were expected, it said.

(By Katharine Gemmell)