Iron ore prices edged lower for the fourth consecutive session as the demand outlook in China weakened. The 62% Fe fines benchmark fell 1.69% to $102/mt, approaching the $100/mt psychological level. Chinese steel mill margins have compressed significantly, with rebar margins declining to $12/mt from $28/mt in April and $45/mt at the start of 2026.
Port inventories at Chinese major ports rose 1.3% week-over-week to 148.5 million tonnes, the highest level since March. The inventory build reflects both steady seaborne arrivals (averaging 10.4 million tonnes per week) and slowing steel mill restocking. The inventory-to-consumption ratio rose to 36 days, up from 33 days in May.
Chinese crude steel production in May totaled 92.8 million tonnes, down 1.2% from April but still 1.5% above year-ago levels. The modest production decline reflects ongoing government-mandated output caps to meet carbon reduction targets. The National Development and Reform Commission (NDRC) has maintained its policy of keeping annual steel output below 1.02 billion tonnes.
On the supply side, Australian iron ore shipments totaled 74.2 million tonnes in May, up 3.5% from April, driven by Rio Tinto's Robe Valley and BHP's Newman operations. Brazilian exports from Vale reached 28.8 million tonnes, flat month-on-month. The seaborne market remains well supplied, with no major supply disruptions reported.
Iron ore at $102 is approaching critical support at $100. A break below $100 would target $95-97, levels last seen in January. For buyers, wait for the $100 test. If it holds, enter 20-25% of annual volume. If it breaks, wait for $95 before accumulating. Chinese steel output caps provide a ceiling, but supply-side discipline from majors provides a floor.