FX.co ★ Iron Ore Pressured by Prospects of Higher Supply

Iron ore futures have dipped below 780 CNY per ton, marking a near two-month low. This downward trend follows anticipations of increased supply with the imminent launch of Guinea’s expansive Simandou project. A Guinean official has revealed that the inauguration of rail and port facilities for the project is scheduled for November 11. This development is poised to introduce new production that could potentially alter a market currently led by Australia and Brazil. Additionally, the market is experiencing pressure due to indications of rising steel inventories in China, the world’s largest steel consumer. Market participants are closely monitoring forthcoming data from consultancy Mysteel for further insights into the industry’s status. Concurrently, China's recent customs reports indicate a significant rise in iron ore imports, which climbed by 10.6% in September, reaching a record 116.33 million metric tons. This increase is attributed to robust demand and elevated price levels.