Iron ore prices traded in a narrow range near $100/mt as the market digested mixed signals from China. Crude steel output in May came in at 94.5 million tons, down 2.1% year-over-year, as Chinese steel mills maintained production discipline amid weak property sector demand.
Property sector weakness remains the primary headwind for Chinese steel demand. New housing starts fell 12.4% year-over-year in May, extending the longest downturn in property market history. While infrastructure investment increased 8.6% year-over-year, it is not enough to fully offset the property drag.
Seaborne supply remains robust. Rio Tinto’s Pilbara operations shipped 82.5 million tons in Q2, in line with guidance. Vale reported 82 million tons of production in Q2, up 3% year-over-year. BHP and Fortescue both reported steady production. Total seaborne supply is tracking at 1.6 billion tons annualized.
Chinese port inventories rose to 138 million tons, up 2.8 million tons week-over-week. The inventory build reflects stronger arrivals relative to mill offtake. Port stocks remain below the 150-million-ton level that typically signals oversupply.
Iron ore is range-bound at $95-105/mt with no clear directional catalyst. Chinese steel output cuts and port inventory builds cap upside, while infrastructure demand and supply discipline provide a floor. Buyers should maintain regular procurement cadence without building strategic inventory — the downside risk is greater than the upside if Chinese property weakness intensifies.