SGX iron ore 62% Fe futures edged 0.14% lower to $101.14/mt on June 23, holding near the key $101 level as Chinese steel mills adjust to compressing margins. DCE iron ore futures fell 0.50% to ¥760/mt, tracking the broader steel complex weakness.
Chinese rebar margins fell to ¥150/mt ($21/mt), down from a Q1 2026 average of ¥300/mt, as steel output growth outpaced demand. The margin compression reduces mills' willingness to restock iron ore, particularly for higher-grade material at a premium.
Iron ore port inventories in China rose to 148 Mt, up 2 Mt week-on-week, according to Mysteel data. The inventory build reflects steady import arrivals of 105 Mt in May against slightly lower mill throughput. Port inventory is now 6% above the five-year average.
The iron ore market has been range-bound between $98 and $108/mt since April, with the $100 level acting as strong psychological support. Below $100/mt, higher-cost Chinese domestic iron ore production (average cost $95/mt) becomes marginal, potentially limiting further downside.
The range-bound market ($98–$108) is a procurement opportunity. Buy in $98–$100 range for spot cargoes. The downside is limited by Chinese domestic mine cost support. Use $105 as the ceiling for hedging — if prices break above, the momentum tends to be short-lived.