Iron ore futures rose to about CNY 820 per ton, approaching their highest level since February of last year, as supply disruptions linked to the Middle East conflict created a structural inventory shortfall in the market. Additional support came from higher ocean freight rates and increased energy costs associated with the Iran war.
As oil and gas prices spike, utilities often switch to coal, tightening coal supplies and pushing up prices for coal-linked commodities. Industry data showed that iron ore inventories at major Chinese ports declined by nearly 1% in the week to March 20.
At the same time, analysts warned that higher raw material costs may compress steelmakers’ margins, which could ultimately dampen iron ore demand. In Australia, weather-related disruptions in key northeastern iron ore hubs further heightened supply concerns.
