FX.co ★ Iron Ore Pressured by Weak Demand

Iron ore futures dipped toward CNY 780 per ton on Wednesday, approaching a six-week low due to emerging signs of diminishing demand as the Lunar New Year slowdown approaches, despite anticipations for increased hot metal production. Chinese steel mills maintain robust activity, with production of finished products like rebar and hot-rolled coil picking up pace last week. However, replenishment by mills has stalled as construction sites pause operations for the holiday season. Additionally, port activity in China has declined, with industry data reflecting lower transaction volumes, suggesting a decreased reliance on spot cargoes. Concurrently, shipments from Australia and Brazil increased in late January, contributing to immediate supply pressure. In other developments, China is reportedly aiding Algeria in reopening the Gara Djebilet mine, which stands as North Africa’s largest iron ore deposit.