Iron ore futures edged fractionally higher to $105.13/dmt, maintaining the narrow range between $100 and $110/dmt that has prevailed since March. The market remains well-supplied with steady demand from Chinese steel mills.
Chinese crude steel production is running at an annualized rate of approximately 1.05 billion tonnes, up 1.5% year-on-year, providing a solid demand base for seaborne iron ore. However, Beijing's ongoing commitment to production capacity caps prevents the kind of output surges that previously drove iron ore prices above $200/mt.
Port inventories in China stand at approximately 145 million tonnes, providing a comfortable buffer and limiting the need for aggressive restocking. Inventory levels have been relatively stable, with mills maintaining just-in-time inventory strategies.
Seaborne supply remains ample. Australian exports from Rio Tinto, BHP, and Fortescue have been steady, and Vale's Brazilian exports have increased 2% quarter-on-quarter as the miner continues to recover from previous operational disruptions.
The iron ore market is expected to remain range-bound through Q3 2026, with prices supported by steady Chinese demand but capped by ample seaborne supply and high port inventories.
Iron ore at $100-110/mt provides a stable input cost environment for steel mills. With plentiful supply and stable Chinese demand, there is limited urgency for aggressive forward buying. Monitor Chinese steel policy for any production cut announcements.