FX.co ★ Iron Ore Slips on Weak Fundamentals

Iron ore futures dipped below CNY 790 per ton on Tuesday, approaching their one-month lows, as steel demand weakened ahead of the holiday season and global supply increased. Chinese steel manufacturers reduced purchases in anticipation of the extended Lunar New Year holiday while gearing up for scheduled maintenance, leading to a decrease in short-term demand. There was also a decline in port activity in China, with industry data reflecting lower transaction volumes, indicating that mills are relying less on spot cargoes. According to data from Steelhome, port inventories increased by 1.16% in the latest week as shipments from Australia and Brazil picked up pace in late January, contributing to supply pressures. Additionally, China is reportedly assisting Algeria in reopening the Gara Djebilet mine, North Africa's largest iron ore deposit. Concurrently, Australian mining company Strike Resources has entered into a memorandum of understanding with the Peruvian shipping company Naveria Petral for the proposed development of the San Nicolas port project on Peru's southern coast, which is intended to bolster future iron ore exports.