Iron ore 62% Fe futures edged 0.14% lower to $101.14/mt on Friday, extending the range-bound trading pattern that has held for two weeks. The market remains stuck between $99 and $103, with neither bulls nor bears able to establish momentum.
Chinese crude steel output in May was 86.5 million tonnes, down 0.5% year-over-year and in line with analyst expectations. The marginal decline reflects ongoing weakness in the property sector, which accounts for approximately 30% of Chinese steel demand. New home starts fell 12% year-over-year in May, the 11th consecutive monthly decline.
Port inventories of iron ore in China stood at 148.5 million tonnes as of June 19, up 2.1% month-over-month and near the highest level since March 2023. The inventory build reinforces the message that the market is adequately supplied, with no short-term tightness.
The flat steel output trajectory is consistent with China's policy of maintaining crude steel output at or below 1.0 billion tonnes per year. With H1 2026 output tracking at approximately 530 million tonnes, full-year output is on pace to be roughly flat versus 2025's 1.005 billion tonnes.
For iron ore procurement, the current $99-$103 range represents fair value given the balanced market. Chinese steel output is capped by policy and property weakness, while supply remains ample. There is no urgency to build spot inventories above normal working levels. If the market dips below $98, that would represent a buying opportunity for cargoes loading in Q4 2026.