FX.co ★ Iron Ore Hits Over 2-Week High

Iron ore futures have surged past CNY 790 per ton, marking a high not seen in over two weeks, driven by robust demand from steel mills and indications of tightening supplies in China. Steel manufacturers have increased their iron ore purchases as inventories dwindle, despite facing reduced profit margins and declining steel prices. In China, demand for steel in non-property sectors continues to grow, currently representing over 72% of total steel demand. The property market is beginning to show initial signs of stabilization; however, significant growth in steel and iron ore demand is unlikely unless there is a recovery in new construction activity. On the supply side, China's iron ore production declined by 2.9% year-on-year in October, totaling 84 million tons, while iron ore inventories across 35 major ports decreased by 1.32 million metric tons. Nonetheless, analysts warned that prices might face challenges due to the anticipation of increased global shipments, as China's iron ore imports are set to reach a record high this year.