SGX iron ore futures for July delivery settled at $101.14/mt, essentially flat for the session. The market remains range-bound between $98 and $105, with weak Chinese steel demand providing a ceiling and high-cost iron ore production providing a floor.
China's crude steel production in May was 92.8 Mt, flat month-on-month and 1.2% below May 2025 levels. The annualized run rate of 1.11 billion tonnes is lower than the 1.15 billion tonnes needed to support iron ore prices above $110.
Iron ore port inventories across Chinese ports rose to 148.6 Mt, up 2.3 Mt from the prior week. This is the highest level since February and significantly above the five-year average of 135 Mt. The inventory build is concentrated in smaller port facilities in Hebei and Shandong provinces.
Marginal high-cost iron ore production continues to provide a floor. The industry cost curve shows that 95% of seaborne supply is profitable at $100/mt. Only the highest-cost Indian and Chinese domestic mines operate below breakeven at current prices.
Iron ore at $100-105 is at the marginal cost of production floor. Further downside is limited by high-cost mine closures, but upside is capped by weak Chinese steel demand. Buyers should target $98-100 for Q3 coverage and use the current range as a fair-price entry.