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Global iron ore market volatility and demand shifts

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2026-10-22 06:03 UTC → 2026-10-24 20:49 UTC · added ~~removed~~

The iron ore market has experienced significant downward pressure, characterized by falling prices in China and declining export volumes in India. In China, iron ore prices on the Dalian Commodity Exchange reached an 18-month low, dropping to approximately US$101.84 per metric ton. This decline was attributed to weakening profit margins in the Chinese steel sector, where only about 7% of steelmakers were reportedly operating profitably at the end of September. Declining demand indicators, including a six-month low in average daily hot metal production, have further contributed to the price drop. Concurrently, India’s iron ore and pellet exports fell to a four-year low in September, dropping 67.2% to 700,000 tonnes. This decline was driven by significantly reduced purchasing from China, which saw shipments fall from 1.63 million tonnes in August to 190,000 tonnes in September. Additionally, higher domestic prices in India made exports less competitive compared to the local market. More recently, prices have faced continued volatility, hitting a two-year low before seeing a slight rebound. The Dalian Commodity Exchange contract has traded around the US$100 per tonne mark, while the Singapore November contract rose to US$90.85 per tonne following dip buying and signs of improving steel margins in China. This volatility impacts major mining companies, particularly in Brazil. While companies like Vale saw slight share increases in New York, the broader sector faces pressure from rising maritime freight costs to China, which have exceeded US$40. Analysts suggest that large mining firms with integrated logistics, such as their own ports and railways, are better positioned to withstand these pressures than small and medium-sized companies that rely on the open market. More recent market shifts have seen iron ore trade near a three-year low of US$90 per tonne, down from US$112 per tonne in mid-May. This downturn is linked to weakened steel demand in China, increased global supply, and aggressive pricing negotiations. Specifically, China's state-backed buyer, China Mineral Resources Group (CMRG), has urged Chinese mills to limit deliveries from major miners to facilitate lower pricing agreements. These fluctuations have impacted major mining companies; Rio Tinto’s stock has seen a significant drop of approximately 23% since its peak in early June, while Vale has experienced recent share declines in New York amid broader market volatility.

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