FX.co ★ Iron Ore Rises on Supply Concerns

Iron ore futures saw an uptick to approximately CNY 716 per tonne on Wednesday, breaking a two-day downward trend. This rise was fueled by reduced shipments from major exporters such as Australia and Brazil, which heightened concerns over supply constraints. Additionally, a slight reduction in global seaborne shipments further contributed to the upward price movement. In bolstering this rally, a private survey indicated an unexpected resurgence in China's factory activity in June, suggesting a revitalization of momentum in the world's largest iron ore consumer, temporarily buoyed by alleviated trade tensions between the US and China. Moreover, hot metal output—a crucial measure of iron ore demand—continued to increase on a monthly basis. However, these gains faced limitations due to persistent weaknesses in China's property sector, which negatively affects broader market confidence. Furthermore, the China Iron and Steel Association advocated for stricter controls on specific steel products to maintain a greater supply within domestic borders, potentially mitigating further rises in iron ore prices.