FX.co ★ Iron Ore Pressured by Weak Fundamentals

Iron ore futures have fallen below CNY 790 per ton, edging closer to their lowest level in a month due to increasing supply and worries about demand from China, the world’s largest consumer. The steel industry is experiencing a reduction in demand for iron ore as steelmakers initiate equipment maintenance ahead of the Lunar New Year holiday in February. Analysts are predicting a decline in China's steel exports this year due to fears of a global surplus, a stark contrast to last year when robust shipments stirred protectionist responses among key importing countries. Compounding these supply concerns is the recent arrival in China of the inaugural shipment from Rio Tinto's Simandou mine in Guinea. This project is projected to achieve sales of 5 to 10 million tons by 2026.