DCE iron ore is approaching oversold territory for the first time since the Q1 2024 correction. The 14-day RSI has fallen to 34, within 4 points of the oversold threshold (<30). The downward momentum has been relentless: prices have declined in 8 of the last 10 trading sessions, shedding 7.6% over the period.
A head-and-shoulders pattern has formed on the daily chart, with the left shoulder at 850 CNY/T (April), the head at 800 (mid-May), and the right shoulder forming around 760 (current). The neckline sits at 740 CNY/T. A breakdown below the neckline would signal a measured move to 640-680 CNY/T, or approximately $90-95/mt on the SGX 62% Fe benchmark.
Resistance is now layered at 800 CNY/T (the head of the pattern), 850 (50-day MA), and 880 (200-day MA). The moving averages are in a bearish configuration with the 50-day (825) below the 200-day (870), confirming the downtrend.
The Singapore Exchange (SGX) 62% Fe fines benchmark sits at $101.05/mt, approaching the $95/mt support level that has held since the 2024 lows. A break below $95 would open a test of $88/mt, the COVID-era recovery low.
Volume analysis shows elevated activity on the SGX with put-call ratio at 1.4, suggesting bearish positioning dominates. Chinese import volumes remain strong, but this is more restocking than genuine demand — a distinction that matters for identifying the next catalyst.
The iron ore technical picture is clearly bearish. Buyers should remain on the sidelines for spot purchases unless prices dip toward 700 CNY/T ($98/mt), where a bounce is statistically likely. For procurement teams with Q4 delivery requirements, use this weakness to structure contracts at $95-100/mt with downside protection clauses for Simandou-related price risk.