Iron ore price nears best close since November on year-end metal rally

Iron ore futures were set for their highest close since late November, riding a broader year-end rally in metals as traders look ahead to potential policy support from Beijing.

The steelmaking ingredient advanced for a third straight session in Singapore, climbing nearly 1.8% to as much as $106.55 a ton in intraday trading. In China, iron ore on the Dalian Commodity Exchange rose for a second day, gaining as much as 2.6%, the largest intraday rise since Sept. 9.

The rally comes amid a broader surge across metals, with copper hitting an all-time high and silver smashing past $80 an ounce for the first time. Market sentiment was also boosted by China’s latest call to support resource-based industries as part of its so-called supply-side reform program.

The National Development and Reform Commission said Friday it would deepen these reforms in steel, petrochemicals and similar sectors as part of China’s 15th Five-Year Plan from 2026. This would include the expansion of high-end production while prohibiting unauthorized capacity additions and using market mechanisms to encourage consolidation, it said.

China will also expand government spending and improve how it deploys capital in 2026, the Ministry of Finance said on Sunday after a year-end policy meeting.

Monday’s gains defied a build-up of iron ore stockpiles at Chinese ports — the 10th increase in 11 weeks — to the highest level in more than a year, according to data from Shanghai SteelHome E-Commerce Co. This underscores that the latest rally is being driven by futures sentiment rather than a clear improvement in physical demand.

Iron ore prices have been resilient in recent months, with a ban on some supplies from BHP Group by China’s state-backed iron ore trader helping to provided support. That’s despite the market’s fundamentals being weakened by softening steel demand in China.

Singapore iron ore futures were up 1.4% at $106.15 a ton as of 2:59 p.m. local time. Yuan-priced futures in Dalian rose 1.7%, while Shanghai steel contracts also gained.

(By Katharine Gemmell)