Iron ore prices stabilized this week, with the SGX 62% Fe benchmark oscillating in a $99.50-$101.50 range. The $100 level has been tested four times since June 13 and held each time, establishing it as a near-term support level. The 65% Fe premium fines index was steady at $113/mt.
Chinese port inventories rose marginally to 148.5 million tonnes, still below the 150 million tonne threshold. Inventory levels have been gradually declining since March when they peaked at 152 million tonnes. The decline reflects steady steel production absorbing seaborne supply.
Daily crude steel output in China stabilized at 2.85 million tonnes, suggesting that the production cuts rumored earlier in the month have not materialized. The China Iron and Steel Association reported that major mills maintained output levels despite weak margins. The key question is whether output cuts will be enforced in July to meet 2026's target of keeping crude steel output flat year-over-year.
Seaborne iron ore supply is expected to increase seasonally in July-September as Western Australian and Brazilian mines ramp up for the dry season. Rio Tinto maintained its 2026 guidance of 330 million tonnes, and Vale's production is expected to reach 330 million tonnes, near the upper end of its guidance range.
The $100 level is a battleground between seaborne supply growth and steady Chinese steel demand. For buyers, the current range offers fair value. Consider locking in Q4 cargoes at $98-102 on any dips below $100. The $95 level is the next substantial support if $100 breaks, representing the cost floor for most seaborne producers.